Michigan Democrats Oppose Auto Insurance Changes

Democrats in the Michigan House said Tuesday they would oppose proposed changes to Michigan’s auto insurance laws, including a measure seeking to end the state’s unique requirements for covering people injured in accidents.

Michigan now is the only state that mandates uncapped medical benefit coverage for people seriously injured in auto accidents. The new proposals that could be considered soon in the GOP-led House would instead offer motorists less expensive insurance in exchange for limited personal injury protection coverage. Motorists could choose among $500,000, $1 million or $5 million in coverage.

Democrats say that motorists opting for less coverage could wind up underinsured and in financial trouble if they’re seriously injured.

Rep. Phil Cavanagh, D-Redford, said the changes “would pad the bottom lines of insurance companies” at the expense of consumer protection.

Many Republicans support the proposed changes, saying it would offer motorists choices and possibly lower premiums. They say the current law has driven up insurance costs and may contribute to the number of people driving without insurance.

Current law mandates that regular auto insurance policies handle coverage up to $500,000 in medical costs, after which all insured motorists are assessed a fee to cover more severe cases reimbursed through the Michigan Catastrophic Claims Association. The association, created in the late 1970s, now covers medical bills for roughly 12,800 accident victims across the state.

Unlimited coverage would continue for those currently in the MCCA system, according to versions of the proposal pending in the Legislature. But there would be no such guaranteed coverage for those severely injured in future accidents.