LaSata: Landmark auto no-fault reforms take effect July 1

LANSING, Mich. — State Sen. Kim LaSata reminded Southwest Michigan drivers on Wednesday that the historic auto no-fault law enacted last spring will take effect on July 1.

“This is the biggest change to auto insurance in our state in generations, and one that could save drivers serious money,” said LaSata, R-Bainbridge Township. “With so many improvements made, it is important that motorists familiarize themselves with the changes before renewing their auto insurance policies.”

The reforms, signed into law last spring, were designed to save drivers money by offering more options to better meet individual needs, while improving coverage and consumer protections.

Michigan law requires auto insurance policyholders to carry personal injury protection (PIP), which covers medical costs if a driver is in an auto accident. On July 1, for the first time, motorists will be able to choose from a selection of new coverage levels to better meet their needs and budget.

Each PIP level represents the maximum amount a policy will pay per person per auto accident. Senior citizens who are on Medicare and other motorists whose health insurance plans include coverage for auto accident injuries may now choose to opt out of PIP medical coverage on their auto insurance policy.

Under the new law, drivers may select the following PIP coverage levels:

  • Unlimited
  • $500,000
  • $250,000 (exclusion is available for individuals with qualifying health coverage)
  • $50,000 (for those on Medicaid)
  • Opt-out (for seniors with Medicare)

All auto insurance companies doing business in the state must also reduce the cost of each PIP level for at least eight years. The unlimited plan must be lowered by an average of at least 10% per vehicle; the $500,000 plan by at least 20%; the $250,000 plan by at least 35%; and the $50,000 plan by at least 45%. Those choosing to opt out will not pay a PIP medical premium.

The Michigan Department of Insurance and Financial Services (DIFS) recently announced that the average statewide PIP medical savings under the state’s new auto insurance law will exceed the law’s requirements. Compared to the statewide average rates on May 1, 2019, this year’s average statewide reduction for the unlimited plan is 15.5% per vehicle; 30.6% for the $500,000 plan; 41.8% for the $250,000 plan; and 53.5% for the $50,000 plan.

The new law includes additional consumer protections, including:

  • A fee schedule to control costs medical providers charge auto insurance companies.
  • A new fraud investigation unit to crack down on auto-insurance-related crimes.
  • Tougher fines and penalties for bad actors in the insurance industry.
  • Elimination of non-driving factors, like ZIP code, homeownership status and marital status.
  • Preapproval of all auto insurance rates.

“Choosing the right plan that best meets people’s needs and budget can help maximize savings,” LaSata said. “I encourage Southwest Michigan drivers to consult their insurance agent to learn about their options and how much they can save before renewing their policy.”

For more information on Michigan’s new auto insurance law, including a list of insurance agents, visit, email [email protected], or call 833-ASK-DIFS.


Editor’s note: Sen. LaSata recorded a related public service announcement, which may be viewed at