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Savings for drivers under auto insurance reform law announced

In 2020, Michigan drivers saw the greatest reduction in rates in the nation, with rates declining by 18%, while the nationwide average reduction was just 4%.
A 27% reduction in rates across the market means Michigan is no longer the most expensive state...
A 27% reduction in rates across the market means Michigan is no longer the most expensive state for auto insurance.(Monkey Business - stock.adobe.com)
Published: Nov. 16, 2021 at 11:22 AM EST
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LANSING, Mich. (WILX) - Tuesday Gov. Gretchen Whitmer announced drivers should expect lower costs and more savings for their auto insurance policies over the previous year.

Under the new auto insurance reform that was signed into law by the governor, drivers should see even greater savings on the PIP medical portion of their policies averaging between 25- 62% depending on which coverage options they choose this year. Gov. Whitmer is also reminding drivers who have let their auto insurance lapse that time is running short to take advantage of buying insurance penalty-free before the deadline of Jan. 1, 2022.

Michigan’s new auto insurance law has been in effect for more than a year, and the state continues to promote consumer protections, help families with access to care concerns, and review rates filed by auto insurers. Aggregated data from rate filings approved under the new law show that the average statewide Personal Injury Protection (PIP) medical reductions exceeded the statutory requirements in 2020 and that those savings have further increased in 2021, even when rates are adjusted for the increased mandatory Bodily Injury (BI) coverage level.


PIP Limit
Mandatd PIP Medical
Reduction (compared to average statewide rate on May 1, 2019)

2020 Average statewide reduction * (As of July 2, 2020)

2021 Average statewide reduction* (As of July 2, 2021)
UnlimitedAt least -10%-15%-25%
$500,000At least -20%-31%-39%
$250,000At least -35%-42%-48%
$50,000At least -45%-53%-62%

* These savings represent the statewide average reduction. Savings experienced by individual consumers may be different based on their choice of coverage and factors related to their personal situation, such as driving record and claims history.

“Michigan drivers called for relief from high auto insurance rates for decades, and I am pleased that this bipartisan legislation has resulted in savings, increased consumer protections, and more consumer choices than ever before,” said Gov. Whitmer. “Drivers are able to choose the coverage level that best meets their families’ needs and budget, and even those who’d like to keep unlimited coverage, which provides the nation’s most generous benefits, are still saving money.”

In addition to the reductions listed above, Michigan has seen:

  • An estimated $1 billion in auto insurance savings back in the pockets of Michiganders;
  • The Zebra reported Michigan’s rates declined by 18% in 2020, while the nationwide average reduction due to COVID-19 was just 4%.
  • A 27% reduction in rates across the market, according to Insure.com, meaning Michigan is no longer the most expensive state for auto insurance;
  • Increased market competition, with 36 new companies or affiliates entering the auto insurance market in Michigan to date;
  • A 61% decrease in the annual Michigan Catastrophic Claims Association assessment, with assessment surplus refunds being prepared; and
  • More than 66,000 previously uninsured Michiganders have purchased auto insurance coverage without fee or penalty under the law’s amnesty period.

These lower premiums will save drivers more money on top of the anticipated refund that will be distributed following a unanimous vote from the Michigan Catastrophic Claims Association (MCCA) to grant the governor’s request to deliver refund checks to every Michiganders with auto insurance.

“One of the most important consumer protections is the uninsured driver amnesty period, which helps drivers who have let their insurance lapse purchase insurance without paying a penalty or increased premium - but they must apply before January 1, 2022,” said Michigan Department of Insurance and Financial Services (DIFS) Director Anita Fox. “Starting on January 1, drivers can once again be charged a penalty or increased premium after a lapse in coverage, so we strongly encourage all uninsured drivers to contact an agent or insurer today to apply.”

In 2020, Michigan drivers saw the greatest reduction in rates in the nation, with rates declining by 18%, while the nationwide average reduction was just 4%.

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