NPR affiliate questions whether Michigan’s no-fault reforms lowered auto insurance

The Michigan Department of Insurance and Financial Services released a report earlier this month that it says proves 2019 auto insurance reform has reduced auto insurance costs in the state, but a report by Michigan NPR claims this is untrue. 

In 2019, Gov. Gretchen Whitmer signed auto insurance no-fault reforms, which gave consumers more choice in their level of personal injury protection (PIP) medical coverage, the state’s press release states. 

Milliman, Inc., at the direction of the legislature, completed a report to analyze the reform and its impact on insurance coverage costs and uninsured drivers. 

“In 2019, Democrats and Republicans in the Legislature and I came together to deliver historic, bipartisan auto insurance reform that lowered costs for Michiganders and made insurance coverage more accessible. Six years later, we’re still seeing the positive impact of that reform and how it’s working for Michiganders across the state,” said Whitmer in the release. “I will continue to advocate for protecting Michigan drivers while lowering costs. No-fault reform shows that when we work together, we can make a real difference for Michiganders.”

The release goes on to say that Michigan saw an average overall savings of $357 per vehicle, largely driven by PIP savings, which decreased on average by $369. It also adds that the state’s uninsured motorist rate was 5.4% higher than the national average before the reform and is now 3.9% higher. 

While the report also claims in its opening that the overall savings per vehicle are $357, Michigan Public points out that the number is based on assumptions. It also notes that the report itself shows that insurance premiums increased by an average of $200 since the reforms were enacted. 

“It is not possible to accurately measure the effects of (reforms) by simply comparing actual average pre- and post-reform premiums because the period during which the reform was implemented and thereafter was heavily impacted by the COVID-19 pandemic,” the report says. 

The report goes on to say it is necessary to adjust pre- and post-reform costs for inflation as well as differences in claims frequencies resulting from the COVID-19 pandemic. 

Even within the best estimate, the report claims that the reform didn’t materially impact the average premium for physical damage. 

Consumer Federation of America Director of Insurance Doug Heller told Michigan NPR that the state’s comments are a form of gaslighting. 

“When you have to make adjustments based on assumptions to prove your points, you might not have a good point,” Heller told the media outlet. “People in Michigan know the truth; they see it in their pocketbooks.

“It looks like the state is either trying to protect the interests of the insurance companies, or embarrassed and trying to cover up its own failure to achieve the reforms that were promised.”

Michigan NPR also notes that the state uses tricky wording when talking about uninsured drivers. The release says that the gap between the national average has narrowed. However, the report finds the uninsured motorist rate for the state in 2024 was 16%, while the rate was 13.5% in 2019.

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