The Insurance Alliance of Michigan shares the concern of gubernatorial candidate Abdul El-Sayed about the affordability of Michigan’s broken, outdated no-fault system. However, some of the candidate’s ideas for reform would actually raise, not lower, the cost of auto insurance in Michigan.

Michigan is the only state in the nation that forces its drivers to purchase unlimited lifetime medical benefits with their auto insurance policy, even if they’re covered under health insurance, the Affordable Care Act, or Medicare. This mandate is one of the biggest reasons Michigan drivers pay the highest auto insurance premiums in the country, and Detroit drivers pay more for auto insurance than any other city in the country.

Focusing on some of the rating factors used by auto insurance companies to assess risk will not lower the cost of auto insurance. In fact, it might actually raise the costs. On the other hand, reining in overcharging by hospitals and reducing lawsuits and fraud would definitely reduce costs for consumers. Giving consumers a real choice on their level of coverage would also provide real savings for consumers, a concept overlooked by El-Sayed.

If El-Sayed is truly concerned about the high cost of car insurance in Michigan, here are three common sense reforms to bring relief to drivers across Michigan:

  1. Reduce fraud and scams, which cost the average family hundreds of dollars a year in premiums, by creating a fraud authority.
  2. Reduce medical costs and insurance premiums by adopting a fee schedule, which will set rates for what insurers will pay hospitals for procedures. Currently, hospitals can charge three or four times as much for the exact same procedure, which drives up the cost of auto insurance year after year.
  3. Lower insurance costs by providing drivers a choice of different levels of medical benefits to have the flexibility to choose what works best for them and what they can afford.


Pete Kuhnmuench, executive director
Insurance Alliance of Michigan

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