Reforming auto insurance has been a priority since the beginning of this legislative term — in fact it was a key issue during November’s campaign season for many members. Folks from every corner of our state have been overly burdened by the current system and they made their voices heard.
That’s not to say the current system is bad. In fact, several people called my office or came to Lansing to testify in support of the fantastic benefits traumatic accident victims receive under auto no-fault. I can personally attest to the quality of care, so initially I had some reluctance as we began looking at reforms.
The final product that evolved as the bills moved through the process ended up being the best of both worlds. Under the plan, which was recently signed into law by Gov. Gretchen Whitmer, individuals will now have a choice when choosing their auto insurance coverage. The new law gives consumers multiple personal injury protection (PIP) coverage options, which will allow them to choose coverage based on their personal needs. Seniors with Medicare or individuals with private health insurance could opt to use those benefits as well.
This allows drivers who wish to pay for the premium package to still do so and still receive the quality care that makes no-fault so appealing to many. Folks who simply cannot afford that level of coverage still will have options that provide quality care at a more affordable rate. This is the most important part of the package. People should always have a choice; they should never be saddled by a one-size-fits-all plan. No other insurance operates that way, and auto insurance should not be an exception.
The new law also targets excessive health care costs by installing a fee schedule to bring medical care from an auto accident in line with non-auto-related care. We’ve seen medical bills with costs inflated exponentially simply because a car was involved. That’s not right, and I am glad that was addressed in the legislative process.
The Legislature also included language to establish a fraud authority to cut down on fraud within the system, reduce frivolous lawsuits and establish a list of non-driving-related factors that cannot be used by insurance companies when setting rates.
I think this was a great effort that required countless hours of discussion and testimony, tough negotiations and compromise. We finished with a bipartisan product that isn’t perfect but will provide meaningful relief to Michiganders from Detroit to Sault Ste. Marie.
About the author: Wayne Schmidt, R-Traverse City, represents the 37th state Senate District, which includes Antrim, Charlevoix, Cheboygan, Chippewa, Emmet, Grand Traverse, Luce and Mackinac counties.