Michigan Auto No-Fault Law Raises Rates, Increases Uninsured Drivers Post-Reform

Michigan's 2019 auto no-fault insurance reform has resulted in rising insurance costs contrary to state officials’ claims. A report by Milliman, commissioned by the Michigan Legislature, reveals average car insurance premiums increased by nearly $200 from 2019 to 2024, with a concurrent rise in the number of uninsured drivers. Although the state highlighted purported savings in Personal Injury Protection (PIP) costs, these decreases were outweighed by significant increases in other insurance coverages approved by the state's regulatory office. The report underscores the influence of external factors such as the COVID-19 pandemic on driving patterns and insurance claims, complicating the assessment of direct reform impacts. Milliman's analysis indicates that insurance rates peaked in 2024 despite a brief decline following the law’s introduction. Public statements by regulators, asserting the reforms' success based on selective data, have prompted criticism due to their inconsistency with the broader findings. Consumer advocacy groups have challenged the regulatory narrative, emphasizing that drivers have experienced increased premiums and higher uninsured rates, facts that contradict the official messaging. The only observed "drop" relates to Michigan's uninsured driver rate relative to the national average, not an actual decrease in state numbers. These developments have raised concerns about transparency and regulatory accountability. Beyond cost implications, the reform's impact on catastrophic injury coverage has drawn scrutiny. Payment reductions to home-care providers jeopardize long-term care for severely injured crash survivors. Estimates suggest nearly 4,000 injured individuals annually may exhaust their medical coverage benefits, highlighting systemic challenges in supporting high-need patients under the current framework. As debates over Michigan's auto no-fault law continue, insurance professionals, care providers, and policy stakeholders await more accurate assessments and potential corrective actions to address rising costs, coverage gaps, and care access issues. The evolving situation underscores the complexity of auto insurance reform outcomes amidst shifting economic and public health conditions.