Supporters of Michigan's reform of its no fault auto insurance law in 2019 promised it would reduce car insurance premium costs for drivers across the state — and make insurance for Detroiters, who paid the highest premiums of any city in the nation — more affordable.
The evidence so far suggests the law has failed in many cases to deliver on both promises.
A recent survey by Lansing-based Marketing Resource Group found that nearly a third of respondents said their car insurance premiums stayed the same after the passage of the law.
Nearly 36% said their car insurance premiums were higher.
Customers of one company - Citizens Insurance - paid on average $90 more in 2021 than they did in 2019 for car insurance, according to the company's latest rate filing with the Michigan Department of Insurance and Financial Services.
Meanwhile, Citizens Insurance profits rose 24% in the 2020-21 fiscal year, compared to the fiscal years 2017 through 2019.
Doug Heller is an insurance expert with the Consumer Federation of America. He says the Governor and state legislature need to acknowledge that the no fault reform has failed to lower insurance costs for many Michiganders, "so it doesn't just turn out to be a spigot of cash to the insurance companies."
Heller said the Citizens Insurance rate filing shows an even more troubling issue. He said Detroiters now appear to be paying much more for car insurance than other people in the state for far less coverage.
In one example, Citizens Insurance charges $1,596 for drivers with good credit scores who live in the 48215 zip code in Detroit for the lowest amount of personal injury coverage ($50,000). That does not include other aspects of car insurance premiums, such as property damage liability, collision, and comprehensive.
But in the 48085 zip code in Troy, Citizens Insurance charges $656 for drivers with good credit scores for the highest level of personal injury protection — "unlimited" PIP.
"That's beyond unacceptable," Heller said. "What's happened is you've created a kind of second class citizenry of people that get less protection for dramatically higher premiums because they live in Detroit."
Heller says the inequity is especially disturbing because many of the strongest proponents of the no fault changes, including Detroit billionaire businessman Dan Gilbert, and Detroit Mayor Mike Duggan, said lowering rates in the city was the single most important reason to support the law.
Emily Trevallion, a spokeswoman for Citizens Insurance said the company's rates have been reviewed and approved by the Department of Insurance and Financial Services. "These rates fully comply with the mandated PIP rate reductions as part of no-fault reform."
Trevallian said Citizens Insurance is also working to return millions of dollars in refunds to Michigan car owners, taken from a surplus in the Michigan Catastrophic Care Fund.
That fund was set up to pay for the care of the most severely injured car crash survivors. There are more than 18,000 such Michiganders who had been receiving lifetime attendant and other care from the fund.
The new no fault law cuts insurance payments to these survivors' long term care providers by nearly half, and many are going out of business.
Some survivors have died as a result of losing care, and others have landed in hospitals because there was no other place for them to go.
Provider trade groups such as the Brain Injury Association of Michigan say hundreds of people are expected to face grave risks to their quality of life, their health, and their lives in the months ahead as more companies shut down.
