LANSING — Motorists in the Great Lakes State will be required to buy a considerably larger amount of liability coverage under the new auto insurance law signed by Governor Gretchen Whitmer recently, but the law won’t guarantee savings according to one top insurance industry executive.
“We sure hope that they don’t wash each other out,” said Tricia Kinley, executive director of the Insurance Alliance of Michigan, to the Free Press.
“We simply don’t know how the premiums will shake out.”
Whitmer had said she would only sign the law if it guaranteed savings for Michigan drivers.
But Whitmer’s office disagrees, the Free Press report said. According to Tiffany Brown, a spokesperson for the Whitmer administration, “insurance executives are attempting to scare Michiganders.”
The bill was signed on May 30 of this year, and requires Michigan residents to pay extra for personal injury protection coverage. It also will remove “no fault” auto insurance coverage in Michigan, which has long granted large, lifetime injury sums to people suffering serious injuries from car accidents in the state.
“We will continue to use the full power of this administration, along with the Department of Insurance and Financial Services, to ensure that insurance companies are enforcing a law that protects consumers, while holding big insurance companies accountable,” Brown said.
According to Christopher French, an expert in insurance at Penn State Law, both the liability and insurance portions of Michigan auto insurance premiums and private health insurance costs will actually increase under the new law.
But French also told the Free Press that drivers will still enjoy overall savings because fewer medical costs will be covered and there will be fewer medical procedures.
Currently, Michigan drivers are only generally required to have $20,000 in liability coverage for the injury or death of one person in an accident, and $40,000 in coverage for the injury or death of two or more people in an accident.
The new minimums for these situations will be $250,000 to $500,000, although motorists can request and received lesser coverage amounts.