Michigan's Auto Reform Saved Me $384 per Year on Car Insurance

No, this isn’t a GEICO ad! My car insurance is really set to decrease by nearly $400 per year when the auto insurance reform in Michigan takes place.

I heard about the full no-fault insurance reform bill (proposed in 2017) and was curious how it would impact my car insurance premium. I contacted my insurance agent and he told me that it would likely reduce premiums for older people due to the nature of Medicare. He got back to me in less than a week with my options and how I could save.

I learned that car insurance is still based on factors like your vehicle, age and driving record but now you may be able to select your PIP (personal injury protection) coverage if you have enough medical coverage through your health insurance.

Michigan Auto Reform Summary

Auto insurance policy changes are set to begin on July 2, 2020. The most simple explanation of how this impacts car insurance is that it allows you to select a coverage amount for PIP. Your choices are:

$50,000 plus $200,000 for medical treatment at the hospital


• $250,000 for medical treatment
  
• $500,000 for medical treatment
  
• Unlimited for medical treatment (your premium won’t change if you choose this option)

How did my own personal policy change? I was offered a $500,000 limit that would save me $32 every month or a $250,000 limit that would save me $34 every month. I went with the $500,000 PIP limit for a savings of $384 per year because according to this article, 99 percent of all PIP claims are covered with a $500,000 limit.

In addition, insurance providers can’t factor in gender, marital status, homeownership, education, occupation, credit score or ZIP code to determine your premium rates.


What is PIP?


PIP is personal injury protection. It covers medical bills if you or a passenger in your car are injured in an accident. The new auto reform allows you to completely opt out of this coverage if you’ve got enough coverage through your medical insurance.

The amount you can save all depends on your policy and company. Now is a great time to shop around and get quotes. You may be able to save by switching carriers and/or reducing your medical coverage. The only way to know for sure is to talk to your agent.

Don’t have an agent? Find one here.


Next Steps


Contact your agent to inquire about coverage options and how much it would decrease your monthly premiums. If you do nothing to your policy, you’ll automatically default to unlimited PIP coverage and your policy won’t change. You’ll still be able to make changes in the future if you decide to.

This is a game-changer for Michiganders and I’m hoping our state residents will save a ton of money on car insurance premiums. Michigan residents, we’ve had the highest car insurance rates in the country since 1973. Is this just a start or do you think more reform is necessary to help drivers curb the cost of high premiums?