Driving down costs

There's opinions on both sides of the street over a no-fault auto insurance reform bill that rolled into the state Legislature this week.
Marie Havenga
Apr 27, 2013


For consumers, the bill would likely lower auto insurance premiums by about $250 per year, according to the insurance industry.

But that may come at a cost to taxpayers, according to health care professionals, who say tax dollars would have to pick up the slack with a proposed cut from the current unlimited medical benefits from injuries suffered in a car crash to a $1 million cap.

The proposed reform bill also includes a $125-per-vehicle reduction in auto insurance premiums for the first year, with hopes of increased savings thereafter. A new $25 per-policy fee would go toward Medicaid.

Michigan drivers pay nearly 50 percent more in average annual premiums than motorists in Ohio and Indiana. The average Michigan premium is $1,042, compared to $695 in Ohio and $710 in Indiana, according to the National Association of Insurance Commissioners.

Gov. Rick Snyder vocally pushed for reform early this year in his State of the State address. The Republican governor said high insurance rates were a drag on the economy.

Michigan is the only state in the nation with unlimited lifetime medical benefits. Once injury payments crest $500,000, the Michigan Catastrophic Claims Association kicks in to cover the rest.

The annual state-mandated MCCA charge is $175 per vehicle this year, up from $145 in 2012. It is scheduled to jump to $186 on July 1.

The fee has increased 2,500 percent in the past 12 years, according to the National Association of Insurance Commissioners.

Following national opinion trends, local health care leaders tend to oppose capping medical benefits while area insurance agents have mixed feelings.

Jodi Spencer, an agent with Bridgeview Insurance in Spring Lake, said she's witnessed catastrophic accidents that require expensive ongoing care. She cited a 15-year-old local girl who suffered a severed spinal cord in a car crash about five years ago.

To read more of this story, see Saturday’s print or e-edition of the Grand Haven Tribune.


Say no to new taxes

2,500% increase in 12 years? That right there tells you it needs to be changed.


There needs to be change to no-fault auto insurance, many changes, but medical benefits caps isn't one of them. Unless you know all the no-fault laws, it is difficult to make an informed determination. This article does not begin to tell you the reasons auto insurance has such high prices in Michigan. The biggest culprit is the medical profession, the second the insurance companies themselves. No one wants to think they might need or their loved ones might need lifetime no-fault medical benefits...until they do. A cap would financially ruin an already devastated family.


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