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Auto Insurance Reform Proposal: Is it Worth the Trade-off?

A State House proposal would change Auto No-Fault to allow motorists to choose degree of catastrophic coverage

A trade-off is being proposed in the latest idea for auto insurance reform.  A plan by Republicans in the State House would allow motorists to purchase $10 million in additional insurance coverage for catastrophic injuries.  Low income families could opt for a lower rate–$50,000.

The idea is to find a way to make insurance more affordable in Michigan.  While No-Fault is mandatory, some feel there could be ‘tweeks’ that could provide coverage but not to the extent it is required now.

State Insurance officials say the change would result in lower premiums for drivers of about 10-percent for at least two years.  After that, it’s likely other costs would increase the numbers down the road.  Democrats are already firing back on the proposal saying the savings on premiums wouldn’t be worth what motorists would have to give up in coverage.

Michigan is the only state in the Union that offers unlimited medical benefits for catastrophic injuries and rehabilitation.

The “one-of-a-kind” coverage costs motorists $186 more per year, per vehicle.

The battle over changes to the state’s No-Fault Insurance Program has been going on for years pitting those who believe motorists should have a say on the amount of coverage they want and can afford versus those who say it will leave those suffering severe head trauma and other catastrophic injuries without the funding they need to cover treatment costs.

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