Sen. Ruth Johnson supports bipartisan auto no-fault reform

Sen. Ruth Johnson supports bipartisan auto no-fault reform

LANSING, Mich. — Sen. Ruth Johnson on Friday supported bipartisan legislation to lower the cost of auto insurance for Michigan drivers. The bill now heads to the governor to be signed.

“Michigan has the highest auto insurance rates in the entire country,” said Johnson, R-Holly. “It’s a moral issue. You can’t tell people they have to pay for something they need to get to work, to get their kids to school and they just literally cannot afford it.”

Studies have shown that Michigan drivers pay auto insurance rates that are up to 83% higher than the national average. A number of factors contribute to Michigan’s high rates, but most notable is the unlimited personal injury protection (PIP) insurance that Michigan drivers are required to purchase. No other state requires this unlimited coverage.

“Focusing on the PIP costs is essential,” Johnson said. “When the system results in auto insurance premiums that are more than the value of the vehicle, it contributes to more uninsured motorists. Giving options not only lowers rates but ensures that accident victims receive necessary medical care because they can now afford insurance.”

Senate Bill 1 would give drivers flexibility when choosing their PIP coverage. The bill would require auto insurers to offer Michigan drivers the option of multiple levels of PIP coverage. Drivers with qualified medical coverage — such as employer health insurance or Medicare — could opt out of PIP coverage since they already have medical coverage for injuries.

Drivers would also be able to choose an unlimited coverage option like what is currently required, but with a minimum 10% PIP rate reduction.

The reform would also reduce the cost of the Michigan Catastrophic Claims Association assessment for drivers who select a lower PIP coverage level. The legislation would also provide greater transparency in health provider billing practices and crack down on unnecessary medical treatments and other types of fraud.

“The anti-fraud component is very important to me personally” Johnson said. “Fighting fraud and corruption has been a theme in my public service, and it is definitely a piece of the puzzle in any type of meaningful auto insurance reform.”


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