Whitmer signs bipartisan Michigan auto insurance bill on Mackinac Island

Lawmakers say Senate Bill 1 will save drivers money

The governor signed the bill May 30, 2019 on Mackinac Island. 

MACKINAC ISLAND – Michigan Gov. Gretchen Whitmer signed the bipartisan bill aimed at lowering auto insurance rates during the Mackinac Policy Conference on Thursday.

Whitmer, along with Republican leaders, agreed to a deal to lower auto insurance premiums in the state, which are the highest in the U.S, last week. The Michigan Legislature passed the bill on Friday.

“By signing this legislation, we are providing relief to millions of drivers across the state and guaranteeing a better auto insurance system for everyone,” Whitmer said. “This historic deal shows that, when we put party aside, we can find common ground on our state’s toughest issues to provide realistic and affordable coverage options for drivers across Michigan.”

Michigan Gov. Gretchen Whitmer on May 30, 2019 speaking at the Mackinac Policy Conference where she signed the state's auto insurance reform bill.

According to the governor's office, Senate Bill 1 "reforms a broken auto insurance system and offers historic protections for drivers across our state" and will save drivers money by:

  • Guaranteeing lower rates for drivers for eight years;   
  • Protecting people’s choice to pick their own Personal Injury Protection (PIP) options with coinciding PIP rate reductions, offering unlimited coverage (10% PIP reduction), $500K coverage (20% PIP reduction), $250K coverage (35% PIP reduction), $50K coverage for Medicaid eligible recipients (45% PIP reduction), or a complete opt out for seniors or anyone with sufficient private insurance (100% PIP reduction). 
  • Increasing consumer protections by banning companies from using non-driving factors, such as ZIP code, FICO score, gender, marital status, occupation, education attainment, and homeownership, to set rates. 
  • Setting fee schedules for hospitals and providers to prevent overcharging for auto-related injuries.   

Michigan is the only state to require that drivers buy unlimited personal injury protection benefits with their auto insurance policy. Lawmakers want to let motorists forego full coverage if they have other health insurance to handle their crash injuries, and to stop forcing car insurers to reimburse much more for treatment than health insurers do.

Read more: Michigan auto insurance bill: Understanding rate decreases, timeline of changes

The average premium in Michigan - which is $2,693, according to the most recent report from The Zebra, an insurance comparison website - is 83% higher than the national average of $1,470. Detroit's premium on average is $5,464, far surpassing any other U.S. city.

Detroit Mayor Mike Duggan, who filed a lawsuit last year asking that the 1973 no-fault law be declared unconstitutional for failing to provide fair and equitable insurance rates, said the bipartisan agreement is "outstanding" and "will cut rates for Michigan drivers significantly."

The compromise came the same week that billionaire businessman Dan Gilbert took initial steps toward launching a ballot drive as a "failsafe" in case the Legislature and governor did not enact legislation. The move would have enabled GOP lawmakers to overhaul the insurance law without having to worry about a gubernatorial veto.

About the Authors:

Ken Haddad is the digital content and audience manager for WDIV / ClickOnDetroit.com. He also authors the Morning Report Newsletter and various other newsletters. He's been with WDIV since 2013. He enjoys suffering through Lions games on Sundays in the fall.

Dave Bartkowiak Jr. is the digital managing editor for ClickOnDetroit.