Michigan Legislature starts the engine on auto no-fault insurance talks

For the second year in a row, Michiganders will see an increase in the mandatory fees to cover unlimited medical benefits for injured drivers, under the state's catastrophic claims program. (WWMT/MGN Online)

Michigan’s auto insurance laws are a political hot bed and every year the Legislature takes up the issue in attempt to reform the system.

During the 2018 lame-duck session, the issue surfaced almost as quickly as it fell flat. This week, lawmakers said it is a top priority.

“When we are out in our districts, every time we turn around, someone is asking us about insurance,” Rep. Lana Theis, R-Brighton, said. “I think there’s significantly more pressure this year. It doesn’t’ look like the prices are ever going to go down.”

On Wednesday, the Senate Committee on Insurance and Banking heard a presentation from the Citizens Research Council on Michigan, a non-partisan nonprofit organization in Lansing. The data presented by the council's president, Eric Lupher, focused on the medical costs that play a role in driving up auto insurance costs.

Drivers in Michigan are required to buy insurance that includes personal injury protection coverage, known as PIP. Lupher said that coverage is equivalent to duplicative healthcare insurance.

Three states in the country have no-fault auto insurance systems: Michigan, New York and Florida. Lupher said Michigan sees more lawsuits than states without a no-fault system.

Theis, who chairs the Insurance and Banking Committee, said change to the system is necessary. She said Michiganders are paying for a lack of action in Lansing.

“It desperately harms the poor. We are keeping them from going to work. We are making them choose between their food and medicine or their auto insurance; and if they have to make that choice, they are choosing food and medicine. You can’t blame them, but then if they drive, we are forcing them to drive illegally,” she said.

In years past, plans to reform the system have fallen apart. Theis said she hopes politics will not play a role in the conversation, again.

“If you have an R next to your name, if you have a D next to your name, your constituents are getting overcharged by their insurance,” she said. “We need rates that people can actually afford to pay. We need them to be able to get to and from work, legally. I don’t want to have another constituent have to get a second job so that their 16-year-old can get on the road, legally.”

In the Senate, Theis and Sen. Aric Nesbitt, R-Lawton, introduced the first bill in the chamber of 2019 aimed at changing the system. Theis said she plans to hold more committee hearings that bring more experts to the table with solutions.

“I love the approach we are taking this year. We are listening to the experts. Please come to us, give us the solutions that actually drive down the cost of insurance for the people of Michigan,” she said.

Follow Political Reporter Mikenzie Frost on Twitter and Facebook. Send tips to or 517-897-4861.

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