Michigan auto insurance premiums down 18.8% five years after no-fault reform

Jennifer Jones ; 2025-11-20 02:40:22

Analysis credits sharp declines to policyholders choosing limited or no PIP medical benefits

Motor & Fleet

By Kenneth Araullo

Dec 04, 2025Share

Average personal auto insurance premiums in Michigan fell 18.8%, or $357, in the five years after the state’s no-fault reform, according to a legislatively commissioned study released by the Michigan Department of Insurance and Financial Services.

The analysis, conducted by Milliman, focused on private passenger cars, SUVs, trucks and vans, and did not include classic or antique vehicles.

DIFS said several trends have emerged since the May 2019 reforms, including an initial period of access-to-care issues that appears to have eased as the market adjusted, courts issuing decisions and regulators processing consumer complaints.

Michigan remains the only state where drivers can still elect unlimited lifetime medical benefits after a crash, DIFS director Anita Fox said, while the reform created new coverage levels that can reduce premiums.

Gov. Gretchen Whitmer said in a statement that the no-fault overhaul “shows that when we work together, we can make a real difference.” She has framed the law as aimed at improving both affordability and choice for Michgan policyholders.

Milliman reported that personal injury protection premiums dropped 44.7% following the reforms. The consulting firm attributed much of that decline to policyholders selecting limited or no personal injury protection medical coverage in place of the traditional unlimited option.

Read more:Michigan lawmakers weigh new deductible rules for auto insurers

Policyholders who opt out of unlimited PIP coverage also avoid the Michigan Catastrophic Claims Association assessment on anticipated new claims, which stood at $70 per insured vehicle at year-end 2024. The study noted that even drivers who kept unlimited PIP saw premium reductions tied to the new medical fee schedule and changes to the order of priority for paying claims.

Milliman said the MCCA has taken on some post-reform claims that were previously shared with auto insurers. Under current rules, MCCA reimburses no-fault carriers for PIP medical claims that exceed $675,000 on policies with unlimited lifetime coverage.

The study found that MCCA assessments for anticipated new claims increased in the years leading up to the 2019 law change but have since fallen by $142 per insured vehicle. At the same time, anyone injured in a Michigan crash now seeks PIP benefits through the Michigan Assigned Claims Plan rather than another driver’s insurer.

Michigan’s evolving regulatory landscape

Against that backdrop, lawmakers are considering further adjustments that could influence how drivers share costs with insurers.

House Bill 5030, introduced in September, would require personal protection insurance deductibles to be offered in $1,000 increments, with the maximum deductible linked to the average amount paid in PPI benefits for motor vehicle accidents in the prior year, potentially reshaping deductible structures and premium calculations if it becomes law.

Read more:Michigan bill demands insurance agents disclose exactly who they represent

Policymakers are also looking at distribution and sales practices as the no-fault market evolves. House Bill 4854 would require insurance agents to disclose exactly whom they represent before selling or negotiating coverage in Michigan, adding a defined transparency and compliance step for producers and clarifying whether an agent is acting on behalf of the insurer or the insured in each transaction.

Average bodily injury premiums in Michigan rose significantly in 2021, Milliman said, then stayed relatively flat through 2023 before increasing again in 2024, a pattern the firm linked in part to COVID-19-related delays in court proceedings and claims litigation.

DIFS reported that the 2019 reforms have also reduced the state’s uninsured motorist rate gap relative to the national average, narrowing it to 3.9% from 5.4% before the law took effect.