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 $50,000, $250,000 and $500,000. Individuals with other health insurance (including Medicare and Medicaid) 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 10 percent to 80 percent depending on the coverage selected. Those who have other health insurance coverage who choose no PIP coverage would not be required to pay for it. Customer surcharges for Michigan Catastrophic Claims Association coverage for unlimited PIP claims above around $500,000 would likely fall even more for customers who don't choose unlimited coverage.
Medical service providers and hospitals could not charge more for medical care given to crash victims than the amounts prescribed by the state’s workers compensation insurance law. Limits would also be applied to long term care costs including weekly “attendant care” hours provided by relatives.
The bill would also make trial lawyers liable for insurance company costs incurred defending against lawsuits based on claims for excessive or medically unnecessary crash victim treatments, or if the attorney improperly solicited a case (“ambulance chasing”). It would create an automobile insurance fraud task force within the Michigan State Police tasked with pursuing and prosecuting fraud cases.
Insurers could not set rates on the basis of “non-driving factors” for which there is “no rational correlation between the factor and insurance losses.” The Department of Insurance and Financial Services would be required to promulgate rules banning rate-setting factors that lack a rational connection.
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.