Michigan Auto Insurance Premiums Drop 18.8% Five Years After No-Fault Reform

Michigan's personal auto insurance premiums have decreased by an average of 18.8% over five years following the state's 2019 no-fault auto insurance reforms, according to a Milliman study commissioned by the Michigan Department of Insurance and Financial Services (DIFS). The study highlights a significant 44.7% drop in personal injury protection (PIP) premiums as many policyholders switched from unlimited to limited or no PIP medical coverage options introduced by the reforms. The reforms grant Michigan drivers unique flexibility, as it remains the only state where unlimited lifetime medical benefits after a crash can still be elected. However, those choosing limited PIP coverage benefit from lower premiums and avoid the Michigan Catastrophic Claims Association (MCCA) assessment, which funds claims exceeding $675,000 on unlimited policies. The MCCA's anticipated new claims assessments have decreased notably since the law's enactment. Initial post-reform market disruptions included access-to-care challenges, though these have somewhat stabilized through regulatory actions and court rulings. Additionally, Michigan's uninsured motorist rate gap has narrowed, indicating improved coverage levels compared to the national average. Emerging legislative proposals in the state could further reshape the auto insurance landscape. House Bill 5030 proposes personal protection insurance deductibles in $1,000 increments capped by recent average PIP benefit payouts, potentially impacting premium pricing and deductible structures. Meanwhile, House Bill 4854 aims to enhance transparency by mandating insurance agents disclose their representation status during sales or negotiations, clarifying whether they represent insurers or insureds. The study also identifies trends in bodily injury premiums, which spiked in 2021, stabilized, then rose again in 2024, partly due to COVID-19-induced delays in claims litigation and court proceedings. These factors, alongside post-reform adjustments, continue to influence Michigan's auto insurance market dynamics. Overall, the 2019 no-fault reforms have brought material premium relief for many Michigan drivers while prompting ongoing regulatory and legislative developments to balance affordability, coverage diversity, and market transparency.