New auto insurance reform law to help Michigan drivers save money

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An unsold 2021 S70 sedan sits at a Tesla dealership Sunday, Nov. 8, 2020, in Littleton, Colo. Tesla will be added to the S&P 500 index on Dec. 21. Based on its market value Monday, Nov. 16, 2020, the electric car maker would be one of the top 10 companies in the benchmark index upon entry. (AP Photo/David Zalubowski)

LANSING, MICH — Governor Gretchen Whitmer and the Michigan Department of Insurance and Financial Services (DIFS) today applauded further cost reductions drivers will see under the state’s new auto insurance reform law as the Michigan Catastrophic Claims Association (MCCA) announced a reduction in its annual assessment charged on auto insurance policies.

The 14% savings per vehicle to the assessment reflects a further reduction in costs achieved through the historic, bipartisan auto insurance reform that Governor Whitmer signed into law in 2019.  

“It is clear that the new auto insurance law is putting more money in the pockets of Michiganders. The reduction in the MCCA annual assessment is another example of how the reform is helping to reduce costs and provide savings for Michigan families,” said Governor Whitmer. “In these difficult times, it is more important than ever that Michiganders see rate relief. I’m pleased that these reforms are continuing to result in greater savings than required in the law.” 

The reduced assessment announced today to $86 per vehicle will take effect July 1, 2021. This is the second time the assessment has been reduced due to cost reductions under Michigan’s new auto insurance reform law, with a drop from $220 per vehicle to $100 per vehicle that took effect July 2, 2020.  

Under Michigan’s old auto insurance law, each driver had to purchase unlimited Personal Injury Protection (PIP) medical coverage and pay the MCCA assessment, which reimburses insurers for catastrophic medical claims. Under the new law, Michigan drivers can still choose unlimited medical coverage but can now also choose the level of PIP medical coverage they want when they start or renew a policy, and only drivers who choose unlimited PIP medical coverage pay the MCCA assessment, as long as the fund  does not have a deficit.  

“Drivers are continuing to benefit from the new choices and new protections from Michigan’s new auto insurance law,” said Lt. Gov. Garlin Gilchrist II. “Today’s announcement is one more reminder that there has never been a better time to get car insurance in Michigan, as drivers can choose the coverage that’s right for them and see real savings.” 

“This reduction in the MCCA annual assessment is a direct result of the new law, and in our role as a consumer protection agency, it is our priority to ensure these savings continue to be passed on to drivers,” said DIFS Director Anita Fox. “Drivers who would like to see additional savings should shop around and talk to an insurance agent or company to learn about the coverage options available to them.”  

Prior to today’s announcement, under the new auto insurance reform law the average statewide PIP medical reductions had already exceeded the statutory requirements. Additional key provisions, including the PIP medical fee schedule, will take effect in 2021. In addition to promoting choice and reducing costs while maintaining benefits, the new auto insurance law also provides for increased consumer protections. The new law prohibits insurance companies from using certain non-driving factors when establishing premiums, provides stronger anti-fraud protections, and increases fines and penalties on insurance companies, agencies, and licensed agents. 

DIFS continues to offer monthly virtual town halls to answer drivers’ questions about the new auto insurance law, and operate its dedicated, no-fault hotline with calls being answered Monday through Friday from 8 a.m. to 5 p.m. Drivers can call 833-ASK-DIFS (275-3437), email, or visit for more information. 

The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit or follow the Department on FacebookTwitter, or LinkedIn.  

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