Michigan’s new car insurance policies impact the local community

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LANSING, Mich. (WLNS)— Governor Gretchen Whitmer signed a new bipartisan auto insurance law in 2019 and went into effect in 2020. The law entails a car no-fault legislation that lowers insurance costs for Michigan drivers, it created a better no-fault system for drivers, and strengthened consumer protections.

Although this new law went into effect last year it’s still fairly brand-new and consumers still have questions. The Michigan Department of Insurance and Financial Services hosted a virtual town hall meeting today to help drivers learn and ask questions about the new car insurance laws signed into law last year. This virtual town hall handled questions for consumer choices on policies issued or renewed after July 1, 2020.


According to the Department of Insurance and Financial Services, a drivers premium depends on the coverage they decide to choose. Plus, any factors related to a driver’s personal situation, driving record, and their driving history of claims.

The Department of Insurance and Financial Services recommends when consumers shop for car insurance they should compare the premiums, limits, and deductibles among insurance companies. This could help consumers get a better deal.

Personal Injury Protection (PIP) Choice

Under the new insurance laws, drivers can choose the coverage that’s appropriate for their budget. Personal injury protection is medical coverage under a car insurance policy issued statewide. The medical coverage could pay expenses for medical care, recovery, rehabilitation, and some funeral expenses if policyholders are in a car accident.

This means no matter who got into the car accident the coverage pays for your own medical expenses.

Michigan is the only state in the country where unlimited personal injury protection medical coverage continues as an option. Personal injury protection places Michigan at the top of the list with benefits in the United States.

Drivers are allowed to opt out of personal injury protection under certain circumstances. If they do choose that option, the entire personal injury protection medical portion of their premium will be eliminated.

According to Michigan.gov these are the medical coverage options under PIP:

  1. Unlimited coverage
  2. Up to $500,000 in coverage
  3. Up to $250,000 in coverage
  4. Up to $250,000 in coverage with PIP medical exclusion(s)
  5. Up to $50,000 in coverage
  6. PIP medical opt-out

Michigan Catastrophic Claims Association (MCCA) Assessment

The Michigan catastrophic claims association reimburses car insurance companies for personal injury protection medical costs that exceed $580,000. The Michigan catastrophic claims association assessment already announced this new reimbursement is amid the new auto insurance laws.

Plus under the new law, insurance companies have to file their rates and policies with the Department of Insurance and Financial Services before they offer them to other consumers.


Prior to the new law, you could be penalized for driving without car insurance in Michigan. Now, there’s an 18-month pardon period for uninsured drivers before purchasing car insurance.

The new auto insurance laws also eliminated non-driving factors as an option to determine car insurance rates which could cause an unfair systemic system. Ridding insurance companies of looking into zip codes, credit score, education level, home ownership, occupation, marital status, and sex.

This new auto insurance law has opened up an investigation unit led by the Department of Insurance and Financial Services.

of Attorney General to search into criminal activity related to insurance and financial markets.

There are many other benefits associated with the new insurance laws if you would like to learn more about what the state is offering visit Michigan.gov, call (833)-ASK-DIFS

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