New Poll Shows that Auto Insurance Law Has Led to Nothing but Higher Premiums and Worse Care

LANSING, Mich.—(Oct. 11, 2024)—While it should not come as a surprise that a new statewide poll shows that big auto insurance companies are continuing to sock it to consumers, many Michigan drivers may not be aware that they likely will not have access to the care they need should they be in a serious accident—even if they choose an unlimited policy. 

The poll, which was released Thursday by the Detroit News and WDIV, found that half of drivers have seen their insurance premiums go up since the 2019 auto insurance reforms, despite promises from state leaders that the law would lower costs. Only 13 percent of drivers saw their premiums go down, the poll found—likely those who chose extremely limited benefit options. Thirty-one percent said their premiums remained the same and 6 percent said they weren’t sure. 

State Sen. John DaMoose, a longtime supporter of crash survivors, said this in the Detroit News column by Chad Livengood: “I’ve yet to meet anybody who says, thinks they're saving anything on their auto insurance. But I've met a lot of people who are shocked to find out how much their coverage has been eroded since the passage of the no-fault reform. 

While motorists may save a few dollars a year by choosing a limited benefits plan, they will find themselves with woefully inadequate coverage should they be one of the nearly 71,000 Michiganders injured every year in a car crash. Once their benefit maximum is reached, these individuals will be covered by Medicaid—a cost borne by Michigan taxpayers. 

But care has eroded even for those who choose unlimited plans. CPAN President Tim Hoste said it is important for consumers to understand that the 2019 reform law has made it nearly impossible for people to find home care companies willing to accept them as patients. 

“The 2019 law, which set an arbitrary government-imposed cap on care for catastrophic crash survivors, effectively made business impossible for providers who offer the highly specialized care that people who have been in a serious crash need,” Hoste said. “Most of these businesses have already shut down. Others are losing millions of dollars every year in the hopes that state leaders will eventually come to their senses and fix this law, which has clearly failed in its stated purpose of significantly reducing costs.” 

Hoste also criticized the Michigan Catastrophic Claims Association, the quasi-public insurance program run by the auto insurance industry that all Michigan drivers pay into, for its mismanagement of funds meant to cover the care of people involved in catastrophic crashes. The MCCA gave every driver a $400 refund in 2022, leading to a $2 billion deficit—a deficit that will be made up on the backs of Michigan drivers. Every driver will be required to pay the MCCA $82 in 2025, even those who don’t choose unlimited benefits and have no access to the care that the MCCA covers.

“In their rush to lower premiums for drivers, state leaders did the bidding of big insurance companies,” Hoste said. “Look where that has gotten us—higher costs for drivers, and worse care for crash survivors. It’s time to revisit this law and improve it for all Michiganders—and this time, consumers and care providers should have a seat at the table.”