Look, that $800 refund from the Auto Insurance Reform was great! But now that we've had a few months to let the new laws and new rates settle – is it really better for Michigan drivers?
Here's Five Fast Facts about Michigan’s Car Insurance reforms …… :
- 🏁 How it started - Everyone cheered as the governor signed the long-awaited insurance reform bill because it promised to bring huge savings to Michigan drivers.
- 🚦 How it went- The honeymoon stage was great – insurance rates dropped that first year - from an average rate of $3,096 in 2019 to $2,535 in 2020. That's an 18% decrease!
- 👎🏻 How it's going - But hold up: that 18% decrease from 2019 to 2020 didn't look so great by 2021. Prices went back up to an average of $2639, which meant savings at that point were mediocre at best.
- 😕 So why the bouncing back and forth? Short answer: the bill just didn't go far enough. The new law didn't eliminate long-term medical benefits under Personal Injury Protection (PIP). Those stayed the same and they are expensive. The new law also didn't address the insurance company "matrixes" - the formulas used to decide how much drivers pay.
- 🩹 How can it be (really) fixed? - By going to court, apparently. The case hit the Michigan State Appeals Court recently. Opponents claim the reform bill unconstitutionally cut reimbursement rates for the long-term care of accident survivors. It's not clear how the courts will respond.
🔥 Bottom line: Getting a refund is nice. Paying less per month in auto insurance is better. But now it appears Michigan motorists are right back at square one - arguing about the best way to balance the cost of care for accident survivors against what we all pay toward insurance coverage. Hang tight! I'm sure this will be resolved quickly (not).
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