To no longer mandate that auto insurance policies include unlimited personal injury protection (PIP) coverage. Customers could still choose unlimited PIP coverage, or choose policies with PIP limits of $250,000, $500,000, and for individuals covered by Medicaid, $50,000. Seniors on Medicare and individuals covered by other health insurance with less than a $6,000 deductible could choose not to purchase any PIP coverage at all.
The bill would mandate that insurers reduce charges for the PIP component of a customer’s policy by an average of at least 45% for policies with a $50,000 PIP coverage limit, 35% for policies with a $250,000 PIP limit, and 20% percent for policies with a $500,000 PIP limit. Those who choose unlimited PIP coverage would get at least a 10% discount over current rates.
Medical service providers and hospitals could not charge more for medical care given to crash victims than twice the amount prescribed for federal Medicare reimbursements (subject to some adjustments). Limits would also be applied to reimbursements for long term care costs, including a cap of 56 hours a week on “attendant care” hours provided by friends and relatives, and payments to others capped at the amounts prescribed by the state’s workers compensation insurance law.
The bill would also increase from $500 to $3,000 the limit on damages for which a person may sue under under a “mini-tort” exception to the no fault insurance law’s general prohibition on vehicle crash lawsuits.
Trial lawyers would be prohibited from suing insurance companies for reimbursement claims that have not been authorized or are not late, or if the attorney improperly solicited a case (“ambulance chasing”).
Insurers could not set rates on the basis of home ownership, educational level attained, occupation or credit score (but could use “credit information”). Zip codes would also be barred as a rate-setting factor, but insurers may still group ratings by 'territory.'
Under current law, Michigan insurance companies must file rate structure changes with the state but can start using them right away ("file and use"). The bill would require auto insurers to wait 90 days before using new rates they have filed, unless regulators approve them sooner.