Bill Could Cut Michigan Auto PIP Premiums by 20%

Michigan drivers would no longer be required to buy unlimited medical insurance to cover serious crash injuries under bipartisan legislation high-ranking supporters proposed Tuesday aimed at reducing the country’s highest auto premiums by at least 20 percent.

The bill backed by House Speaker Tom Leonard, Detroit Mayor Mike Duggan and others would make it optional to carry unlimited personal protection insurance benefits. Michigan is the only state to mandate unlimited coverage.

Motorists could instead buy $250,000 of coverage – guaranteeing themselves a rate rollback – or $500,000 of coverage under the measure. Seniors 62 or older who have Medicare or some other private health insurance could opt entirely out of personal injury auto coverage and have their medical insurance cover injuries – cutting their premium by 35 percent.

Under another cost-saving provision, auto insurers would pay set fees to health providers for treating those injured in car crashes. Car insurers now pay three to four times more for X-rays and other medical services than health insurers do.

The bill also would take aim at fraud that proponents say drives up costs in the auto no-fault system.

The measure faces an uncertain future in the Republican-led Legislature. Past attempts to change facets of auto insurance have failed, and the Senate leader opposes government-mandated rate reductions.

But legislators say high auto premiums have become increasingly burdensome for residents and something must be done. According to an Insure.com report, Michigan’s annual average premium is $2,394; the national average is $1,318.