Dear Neighbors:
High auto insurance rates affect everyone in Michigan. Residents in Detroit pay some of the highest rates in the country, and residents in the surrounding communities also pay exorbitant rates.
Last May, legislative Democrats and Republicans reached an agreement with the Governor to overhaul Michigan’s no-fault auto insurance system, and at the end of that month, Senate Bill 1 was signed into law. As of July 1, Michigan drivers now have the option of lower rates and are able to choose among different insurance coverage, including the choice to keep unlimited coverage.
Inside, is additional basic information on your new options and what they might mean for you. For additional guidance, including how to file insurance-related complaints, you should always contact the Michigan Department of
Insurance and Financial Services at (877) 999-6442 or visit their website, Michigan.gov/AutoInsurance.
Erika Geiss
State Senator
Toll-free: (855) DIST006 or (855) 347-8006
Website: SenatorGeiss.com
Email: SenEGeiss@senate.michigan.gov
COVID-19 RESOURCES
| SENATE DISTRICT 13 RESOURCES Information from my office about COVID-19 SenatorMcMorrow.com | 1- 855-347-8011 | AREA AGENCY ON AGING 1-B Coronavirus resources for seniors aaa1b.org/coronavirus 1-800-852-7795 |
| SMALL BUSINESS RESOURCES Michigan Economic Development Corporation michiganbusiness.org 1-888-522-0103 | CENTERS FOR DISEASE CONTROL How to protect yourself and what to do if you are sick cdc.gov | 1-800-232-4636 |
| REPORT CONSUMER SCAMS Michigan Attorney General Consumer Protection 1-877-765-8388 | TESTING LOCATIONS and more information on Michigan’s response: michigan.gov/coronavirus 1-888-535-6136 |
| MI HELP LINE For health-related questions Available every day from 8 a.m. to 5 p.m. 1-888-535-6136 | OAKLAND COUNTY COVID RESOURCES Local COVID-19 resources www.oakgov.com/covid/Pages/default.aspx | 248-858-1000 |
A SUMMARY OF WHAT YOU CAN EXPECT
Personal Injury Protection (PIP)
- BENEFIT COVERAGE LEVELS
- Unlimited
- $500,000
- $250,000
- $50,000 for individuals on Medicaid only
- Opt-Out for qualified persons with qualified health coverage. Qualified health coverage means:
- Medicare Parts A & B
- Enhance Coordination
- Allow for an applicant or named insured who has selected the $250,000 PIP benefit coverage to reduce his/her PIP benefits premium by 100% if the named insured his/her spouse, and all relatives domiciled in the same household have health coverage that will cover injuries related to an auto accident.
Rate ROLLBACK
BENEFIT COVERAGE LEVELS
- 10% for unlimited PIP coverage plans
- 20% for $500,000 PIP coverage plans
- 35% for $250,000 PIP coverage plans
- 45% for $50,000+Medicaid PIP coverage plans
- 100% for Medicare Opt-Out or for Enhanced Coordination as described above
- The above applies only to the PIP line of the auto policy.
Rating Factors
The substitute will prohibit insurers from using sex, marital status, home ownership, credit score, educational level attained, occupation, or postal code when establishing rates on any type of auto insurance policy.
- While the use of ZIP codes is prohibited, insurers will still be able to use territory as a rating factor. This is an important difference that may limit price spikes occurring between adjacent ZIP codes, but not prohibit the overall use of territory by an insurer when establishing rates.
- There will be exceptions for educational level and occupation, so long as they are used solely for a common enterprise, economic, or social affinity or relation. This is to allow groups like alumni clubs and professional organizations to still obtain discounts for their members.
File and Approve
- Insurers must file rates with the Department of Insurance and Financial Services (DIFS) and cannot use those rates until they are approved by DIFS or 90 days have elapsed, whichever is earlier.
- If DIFS disapproves of an insurer’s rates for noncompliance with the rate, an insurer has 15 days to refile a rate in compliance with the DIFS disapproval order.
Anti-Fraud Unit
- Codify Executive Order 2018-9, which maintains the current fraud authority in DIFS and allows for the maintenance of current Memorandums of Understanding that exist between DIFS, the Attorney General, and the Michigan State Police.
- DIFS is required to provide an annual report on the activities of the Anti-Fraud Unit.
Re-entry Penalty
- Prohibit an insurer from charging a re-entry penalty, limiting coverage available, refusing to provide or continue coverage, or increase premiums for auto insurance for an individual solely because the individual failed to maintain mandatory auto insurance coverage.
- This provision applies for 18 months after the PIP cap levels are available to consumers.
QUESTIONS? Contact the Michigan Department of Insurance and Financial Services (DIFS) at (877) 999-6442 and be sure to keep an eye on their website, Michigan.gov/DIFS, for additional information about the new no-fault auto insurance law.