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Auto No Fault Record Roll CallBy Brian Calley

Last Friday capped off an extraordinary week in Michigan politics. Governor Whitmer and legislative leaders from both sides of the aisle constructed a no-fault auto insurance reform compromise that will add various coverage options, implement cost controls and lower rates across the board.

For decades, debate has raged surrounding Michigan’s unique mandate requiring unlimited lifetime medical coverage on all auto insurance policies. The reform passed both the House and the Senate and has the support of Governor Whitmer.

There are many aspects of the bill, but the largest changes include offering a range of medical coverage options, including a full opt-out option if you have Medicare or separate health insurance with a deductible under a certain threshold. Additionally, drivers could still choose unlimited coverage, $500,000, or $250,000 limits.

The fee schedule for medical claims paid by insurers for accident injuries would be limited to about 200% of Medicare billing rates, which is a large reduction from current costs. There are also some changes and limitations in the use of non-driving factors in how insurance companies set their rates.

Across the board, the legislation reduces premiums on the health cost portion of your policy. The amount of savings depends on which coverage level you choose. Unlimited medical coverage will see a 10% rate cut. Policies with a $500,000 medical coverage limit will be reduced by 20%. And those with a $250,000 limit will see rates reduced by 35%. Seniors on Medicare and those with separate lower-deductible health insurance coverage could opt-out and eliminate that portion of their bill altogether. Both the personal protection options and the mandatory rate reductions take effect in July of 2020.

This was truly a historic vote. And to have it happen at a time of divided government makes it even more extraordinary.

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