Lucido backs landmark auto insurance legislation

LANSING, Mich. — State Sen. Peter J. Lucido said legislation finalized on Friday will dramatically reduce the cost of auto insurance for Michigan drivers while providing them with a selection of coverage options, which come with mandated rate reductions, to meet their individual needs.

“The insane cost of auto insurance has plagued Michigan drivers for decades,” said Lucido, R-Shelby Township. “All of that changes after today — the bipartisan plan we passed will dramatically lower those burdensome costs by giving drivers more choice in what they buy, through cost protections and by going after fraud and abuse.”

Key components of the plan include:

  • Requiring auto insurers to provide customers with a range of personal injury protection (PIP) options, including the ability to opt out of PIP coverage entirely if an individual has other qualified health coverage, a $50,000 policy for Medicaid enrollees, a $250,000 policy, a $500,000 policy, and an unlimited medical benefit policy;
  • Reducing the annual Michigan Catastrophic Claims Association fee by 80% for all above options other than unlimited;
  • Strengthening the insurance fraud division within the state Department of Insurance and Financial Services to empower law enforcement to crack down on auto insurance fraud; and
  • Ending excessive health care costs related to auto insurance claims by implementing a fee schedule to cap the amount providers can charge insurers.

Michigan is the most expensive state for car insurance in the nation, with an average premium that is 83% more expensive than the national average. A recent University of Michigan study indicates auto insurance is unaffordable in 97% of Michigan ZIP codes.

“I am glad that individual legislators and the administration were able to come together in supporting this plan to give Michigan drivers a break,” Lucido said. “It’s a ‘win’ for everyone.”

Senate Bill 1 now goes to the governor for signature.