Maybe the Michigan auto insurance law was “essential” when it became law, but in the last four decades it has become luxurious compared to all other states. Gov. Rick Snyder and insurance committee chairs Sen. Joe Hune, R-Hamburg Township, and Rep. Pete Lund, R-Shelby Township, should be applauded for aiming at reasonable reform as the next big project.

The existing law mandates unlimited medical treatments, and unlimited anything is a a problem for actuaries. Many good folks are getting priced out of the market for coverage, which may be a lot more than they need with comprehensive federal health care kicking in, and rampant fraud adding a significant cost.  The National Insurance Crime Bureau estimates that Michigan now ranks third among the states in questionable medical claims submitted.
Even pared down to $1 million of coverage, the reform would offer Michigan drivers and motor vehicle accident victims 20 times what is mandated in any other state, and backing up to a medical fee schedule probably means that no-fault claimants won’t be paying four times as much as people with other coverage for the same treatments and procedures.
It would be great if this kind of reform would be done just because it makes sense and is good for Michigan residents.  But even adding in a fee to plug a budget hole — a replacement for the problematic surcharge enacted last year on claims payments — and a short term decrease in rates look like practical ways to tee up something that has been needed for a long time.
As we understand it, this stew of public policy would have a net beneficial effect on most all of the players, and we hope will be strongly considered by the lawmakers this session.

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