Michigan Looks for Answers to No-Fault Insurance Problems

Michigan is the only state in the U.S. with car insurance that has unlimited medical coverage.

Michigan is the only state in the U.S. with car insurance that has unlimited medical coverage. (image by businessweek.com)

Michigan has an insurance system unlike any other in the United States. While it isn’t the only state in the union to have no-fault insurance, it is the only state that requires its drivers carry unlimited Personal Injury Protection (PIP). Every other no-fault state places limits on PIP, but Michigan stands alone in requiring an unlimited amount of coverage.

And when we say unlimited, we mean unlimited. We’ve long argued that state minimum coverages are unrealistic amounts that fall short of providing drivers with appropriate coverage in the event of a crash. Conversely, Michigan’s requirement of unlimited medical benefit coverage for those who are seriously injured in car crashes fall on the opposite side of the equation.

One issue that Michigan’s no-fault system creates is that residents there currently pay the highest car insurance premiums in the nation, with the average insurance premium in Detroit coming in at $2,541 annually for full coverage. That’s up from last year, when Michigan policies were the second highest in the nation. And even those who opt for state minimum liability coverage face premiums of more than $1,000.

Such high rates can make car insurance unaffordable for most drivers, and the Michigan state Legislature is currently considering changes to the no-fault system in place, setting up a battle between those who support removing the unlimited medical coverage and those who support keeping the system as it exists now intact.

Michigan state Senator Joe Hune told the Battle Creek Enquirer “If you take a look at the cost of the system, the skyrocketing medical costs, it’s simply unsustainable. There’s going to be a tipping point sometime. The system just can’t sustain itself.”

According to the senator, changes to the system could save residents up to 40 percent or more on their car insurance policies. Detractors say that changes to the system, which would give consumers options, would leave them underinsured.

We’ll be watching the actions taken in the Michigan Legislature as the debate continues. For those in Michigan we ask this question: “Would you prefer being able to select your PIP coverage amounts for a lower premium cost, or keeping the system in place as it is now?”


About Cecil Helton

Cecil Helton Cecil Helton is a U.S.-based writer and editor with passions for cars, motorcycles, boats, technology and social media. Much of his professional life since 1996 has been web-centric, and he’s written and developed content on a variety of subjects. His work in the houseboat industry received wide acclaim, such as winning the 1999 Cisco Systems Growing with Technology award and being named one of five finalists in the manufacturing sector of the 2000 Computerworld-Smithsonian Awards. As an Air Force brat, he spent much of his childhood in a two-year cycle of moving to a new place, making new friends, establishing a life, and then moving again. Destinations included: Kentucky, Illinois, Texas, the Greek isle of Crete, California and Ohio. Today you’ll find Cecil coping with his 15 year old son’s decision to pursue a motorcycle license at the same time he gets his driver’s license, being active across the web on multiple social media sites, and of course, writing articles and creating content on automotive and car insurance related topics right here at CarInsurance.org.


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