Michigan Gov. Whitmer: Car insurance savings will be higher than required


LANSING, Mich. – Gov. Gretchen Whitmer and a top state regulator said Tuesday that drivers will save more on car insurance than is required under a bipartisan overhaul of Michigan's auto insurance law.

Proposed rates filed by insurers, which will start taking effect in July, will be cut more than is mandated, according to the Whitmer administration. She called it “great news."

“It's great to see that it's paying off for Michiganders, especially during a time when drivers may need extra money in their pockets,” the Democrat said in a statement.

Related: Michigan launches website to make sure drivers are prepared for auto insurance changes

The 2019 law will let drivers opt out of what has been mandatory, unlimited medical coverage for crash injuries. There will be six levels of personal injury protection, the portion of a premium that covers medical treatment and rehabilitation expenses. It also covers lost wages and assistance with things like cooking and cleaning.

Under the law, insurers must reduce statewide average PIP medical premiums for eight years. PIP can account for half of a premium.

The state Department of Insurance and Financial Services said it has approved six initial rate filings covering a quarter of the market. People who stick with unlimited benefits and buy policies from those companies will see an average 16.5% reduction on PIP instead of the 10% savings that is required.

Those with $500,000 in coverage will save 36.3% rather than 20%. At the $250,000 level, the cut will be 41.9%, above the 35% spelled out in law. Motorists enrolled in Medicaid, and who therefore can buy $50,000 in coverage, will see 54.3% savings rather than 45%.

Anita Fox, director of the insurance department, said concerns that PIP reductions would be negated by the law's mandated increases in bodily injury liability coverage limits have not borne out. Drivers will save substantially even when the bodily injury coverage is factored in, she said.