I oppose the no-fault model of automotive insurance the way it is currently designed. Prior to the institution of the no-fault model in Michigan, responsible drivers were able to recover damages from the insurance company of the at-fault party in an accident. Under the no-fault model, you must now claim damages from your own insurance company even if you were not at-fault in a given accident. Doing so is accompanied by increased premiums. The no-fault model also forces all drivers to purchase additional collision coverage or risk losing their vehicle in an accident, even if they trust themselves to not cause such an accident. Should another driver be 100% at fault for an accident in which your vehicle is totaled and you do not have your own collision coverage, you would simply be out the value of your vehicle with no legal recourse aside from up to $1,000 in mini-tort damages. All of the above only serves to penalize responsible, safe drivers.
The main intent behind the no-fault model was to allow quick payment of medical bills and damages while avoiding lengthy and expensive litigation in the court system to determine which drivers were at fault in any given accident. The absence of expensive litigation, which is certainly a good thing, was supposed to result in lower premiums. However, in the almost forty years that no-fault insurance has existed in the U.S., it has not had the desired outcome. No-fault insurance, the way it is currently designed in Michigan, has actually been proven to be much more expensive than regular tort insurance systems. In fact, several states have repealed their no-fault laws and have returned to tort insurance systems. No-fault insurance can be a good thing because care is delivered more assuredly than in other states, but Michigan has no limits in place to cap costs that hospitals incur in giving healthcare.
No-fault insurance without any caps to speak of is simply not working for Michigan drivers. Michigan has the most expensive car insurance rates in the nation. Average car insurance premiums in Michigan are $2,551 per vehicle, while the national average is more than $1,000 lower at $1,503 per vehicle. As for our neighbors, Ohio has the cheapest car insurance in the nation at $926 per vehicle, Wisconsin has the 5th cheapest insurance at $1,087, Indiana is 10th at $1,202, and Illinois is 18th at $1,370. All of these neighboring states have rates lower than the national average. An Experian Automotive study found that the average American household owns 2.28 vehicles. Using this figure, if an average American household were to move from Michigan to Ohio, they would save on average $3,075 per year, just on car insurance. How do expect to retain people living in Michigan that way?
Exorbitant auto insurance prices are literally driving people out of our state, particularly here along the border that we share with Indiana. We must reform this system if we are to be a competitive destination state. I support significant reforms to the current system. I also support capping Personal Injury Protection benefits, which are currently unlimited for auto insurance victims. Michigan is the only state in the nation to provide unlimited lifetime medical benefits to auto insurance victims. The states with the next most generous benefits are New York and New Jersey, which cap lifetime benefits at $50,000. I can’t believe that putting monstrous costs on the backs of Michigan ratepayers only to see them potentially leave the state is the answer and I will keep looking for the right answer. The other forty-nine states must be doing something right.