(WLNS) – Michigan is one of 12 states that work under a no fault auto insurance system.
“If you and I are in an accident I go to my own insurance company for benefits both healthcare and to repair my vehicle, and you would go to your own vehicle,” said Pete Kuhnmeunch, executive director, Michigan Insurance Institute of Michigan.
The senate insurance committee met Wednesday and made significant changes to a bill that proposes major alterations to the state’s current no fault law.
Lawmakers made even more changes as it passed through the senate Thursday.
“What the bill does and we’re very pleased with it, it says no fault carriers will pay their fair share but no more than what other payers pay.”
If passed the new law would create a fraud prevention authority and dissolve the Michigan Catastrophic Claim Association and replace it with a different authority into a legacy fund.
All auto insurers must pay the MCCA an annual fee for each insured vehicle. This year that fee is $186.
That money goes toward reimbursing service providers.
Questions are now being raised. If dissolved where will that money go?
“That money really should go back to the people of Michigan, I mean they’re the one who paid it into the system it shouldn’t go to the insurance company,” said Steve Sinas, CPAN Legal Counsel.
But not everyone is convinced these changes have the well-being of Michigan drivers in mind.
“In order to get the care they have to pay more money.”
“The law would restrict payments for attendant care if a family member quits their job to care for a relative injured in an auto accident. They’re entitled up to $15 an hour for compensation right now there’s no cap on compensation.”
What will this do to insurance rates?
“Are we ever going to roll back costs, no i don’t think we’re at that point but I think we can bend down that cost curve going into the future.”
Let’s take a look at the state’s current insurance rates.
According to new data they’re not cheap.
Numbers from the National Association of Insurance Commissioners show Michigan has the 7th highest average car insurance rates in the country.
In 2014 Michigan drivers paid about $1,049 on average. It turns out Detroit topped the list for the most expensive city for car insurance with drivers spending nearly $11,000 on average.
That brings an all new meaning to its nickname as the ‘Motor City.’
The senate made a couple of amendments to the bill Thursday and now it’s made its way to the house.
Where officials expect even more changes to be made.