Why are my auto insurance rates increasing?
Michigan drivers are required to purchase unlimited, lifetime medical coverage for injuries sustained in auto accidents under Personal Injury Protection (PIP).
These costs are escalating at an alarming rate.
They are so high because medical providers will not negotiate charges for their services on auto insurance claims, although they accept lower payments on Workers’ Compensation claims and individuals treated through PPOs (Preferred Provider Organizations).
For example, a hospital may accept as little as $224 for a CT Scan on a Workers’ Compensation claim, while charging an auto insurance carrier as much as $1,820 for the same procedure!
How am I charged for PIP coverage?
Under the current no-fault system, your insurance carrier pays for lifetime medical coverage up to $500,000.
This covers 99% of all injury cases.
In addition to your PIP premiums, there is an additional charge for coverage through the Michigan Catastrophic Claims Association (MCCA).
The MCCA pays for PIP claims once they exceed $500,000 – about 1% of all injury cases. This shows up as a separate charge on your auto insurance policy, and it is based on the number of vehicles insured.
Do I have options?
Presently, No, you do not. And, Michigan is the only state not permitting motorists to choose the level of medical coverage they wish to purchase.
The state of Michigan needs No-Fault reform. Legislation has been proposed in Lansing which would enable you options In selecting varying levels of medical coverage – which would lower the amount of auto insurance premium you pay.
Please contact your legislators and encourage them to support No-Fault reform.