Michigan’s Legislature has begun reviewing a number of bills that would transform the state’s auto insurance laws. State lawmakers have been attempting to confront the issue of excessive auto insurance rates and stem the tide of fraud that is inundating the streets. Amongst a sleuth of new regulations that would curb rate hikes, legislators will be hearing a bill regarding changing the state’s auto insurance into a no-fault system. The bill has already garnered a breadth of support from consumer advocacy groups.
Currently, Personal Injury Protection (PIP) insurance is required for all drivers in Michigan. While PIP provides lifelong, unlimited medical coverage, legislators fear that the mandate may be driving up the overall cost of auto insurance. Michigan is the only state in which PIP coverage is unlimited, which makes the insurance profoundly more expensive and the higher costs put a heavy burden on consumers.
The no-fault auto insurance system would alleviate some of the financial stresses faced by consumers, according to Representative Pete Lund, and consumers will not be forced to break the mandate and risk legal action. Lund claims that the number of people driving without PIP insurance has risen by 11% over the last year. Fewer people buying the coverage means insurance companies are generating less revenue, which will inspire them to raise rates further.
The state Legislature will hear the bill and is expected to rule on the issue by the end of the week.