Legislature approves historic auto insurance reforms

Legislature approves historic auto insurance reforms

LANSING, Mich. — In a special session Friday afternoon, state Sen. Jon Bumstead again joined Republicans and Democrats in voting for reforms aimed at reducing Michigan’s highest-in-the-nation auto insurance rates.

“We’ve worked hard over the last few weeks coming to an agreement that will benefit Michigan drivers,” said Bumstead, R-Newaygo. “For the first time in nearly 50 years, drivers will have the option to choose which coverage best works for their family’s budget.”

Under the current system, all drivers are required to carry unlimited, one-size-fits-all PIP coverage. Senate Bill 1 would give policyholders the choice to select coverage that best meets their needs and budget — providing savings based on the changes they make.

The bill would also give seniors the option of allowing Medicare to cover health care expenses stemming from an auto accident. Those with private health insurance would have the same option.

“Reforming auto insurance is the number one issue in Michigan right now,” Bumstead said. “The reforms approved today are a major step forward for Michiganders. Insurers would be required to offer Michigan drivers five new PIP coverage options, which will guarantee a reduction in rates depending on what option they choose.”

The bill prohibits insurance companies from using certain nondriving factors when setting their rates and aims to provide greater transparency and equity in health provider billing practices; cracks down on unnecessary medical treatments; reduces the system’s susceptibility to lawsuits, fraud and conflicts of interest; and cuts down on the number of uninsured drivers through more affordable rates.

“This discussion has been going on for years and people have had different ideas as to how we would solve the issue,” Bumstead said. “This legislation is a true example of bipartisan work. I’m beyond pleased that the governor worked with the Senate and the House to come up with a plan that benefits drivers in every corner of our state.”

SB 1 now moves to the desk of Gov. Gretchen Whitmer for final consideration.


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