Michigan auto insurance changes: Shifting cost to healthcare

Michigan Gov. Gretchen Whitmer signed a bill that promises to reduce Michigan soaring auto insurance rates, but at a price.

The changes will end the generous health benefits of personal injury protection or PIP that have been included in every car insurance policy in Michigan for 46 years. If you want the benefit, you will have to pay for it.

Starting next July, you can either skip a portion of the PIP, or buy a different level of protection. What happens if you get into an accident and you do not have PIP? Well, if you are not covered by medical insurance by your employer or private insurance, you will have to pay for it.

What happen now is that most likely, your health insurance rates will go up if you do not carry PIP through your auto insurance. What the legislators did is shifting the PIP cost to healthcare.

Worse, most people, if giving a chance, will skip the PIP portion to save money and end up in ruins if they are involved in an auto accident and faced with catastrophic injuries.

Also, the overhaul did address the money itself. On average, each person pays about $192 a year, totaling about $1 billion. The Michigan Catastrophic Claims Association or the MCCA administers the money. The MCCA, a legislatively created nonprofit organization, collects the money and passes the cost onto drivers to pay medical claims for injured motorists that exceed $550,000.

The issue is that the MCCA operates outside of state government and is governed by a board of auto insurance executives, which is often tagged by critics as operating in secret.

The overhaul should have clarified the MCCA’s role and how it spends its money.

For more information how the changes affects you, click here…..

For more information on the MCCA, click here …….

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