No honest person can claim Michigan’s auto insurance law is working

The only ones benefitting are insurance companies

After dispelling the myths promulgated by the insurance industry that everyone is receiving quality care and that the fee cap system implemented under the no-fault reform law is a “common-sense” cost control, we conclude this series by countering their absurd summary statement that the “reforms are working.”

This is the most common messaging that comes from the Insurance Alliance of Michigan and their enablers within the Michigan Legislature, the Department of Insurance and Financial Services (DIFS), and the Michigan Catastrophic Claims Association (who, by the way, have a Board of Directors comprised solely of representatives from big insurance). Yet, as we will prove, the auto no-fault reforms are not working for consumers and are certainly not working for crash victims.

In fact, the only ones benefiting are insurance companies.

The data is clear and abundant: Michigan is still the most expensive state for auto insurance

The stated intent of the 2019 auto insurance “reform” law was to give drivers choice and lower the cost of insurance in Michigan with special attention to Detroit drivers, so let’s get right into how this has failed to come to fruition. The following charts from,, and say it all:






These graphs tell the story – no matter how you break it down – Michigan remains the most expensive state in the nation for car insurance and Detroit remains the most expensive city.

How auto insurers discriminate against good drivers

The reforms were supposed to eliminate insurance companies’ ability to utilize credit scores and zip codes – factors that have nothing to do with how safely someone drives – in developing rates. However, as is the case throughout this narrative, the insurance industry has provided misinformation and still utilizes these factors, keeping rates exceptionally high in Detroit.

The nonprofit group Consumer Federation of America (CFA) analyzed how insurance companies are utilizing credit scores and found that in Michigan, “a safe driver with a poor credit score pays, on average, 263% more for auto insurance than a similar driver with excellent credit — a difference amounting to more than $1,900 per year. Michigan was also the most expensive state for safe drivers with poor credit.” (Source:

So, Detroit drivers are still getting burned by all too high insurance rates. What about the rest of the state? In this article from Michigan Radio from October 2022, the Insurance Alliance of Michigan tried to explain away the rising costs: “Inflation may hit auto insurance rates, just like all other aspects of life, as the cost to repair damaged vehicles and the cost of new and used vehicles to replace totaled vehicles grows…As a result, drivers may see increases brought on by inflation in their comprehensive and collision coverages.”

So, let’s get this straight – the insurance industry recognizes the impact of inflation and the rising costs to repair damaged cars, but out the other side of their mouths, say that it is “common sense” to reduce reimbursement rates for rehabilitation and long-term care by nearly 50% from 2019. Let that hypocrisy sink in. What is sadder and even more frustrating is that their voice is valued and followed by many of our lawmakers and leaders.

There’s no real regulatory oversight in Michigan

Insurers can increase rates because they have no real regulatory oversight on their rate filings, and the 2019 law only requires a certain statewide average percentage reduction on the personal injury protection (PIP) line item of consumers’ insurance premiums – IT DID NOT GUARANTEE OVERALL RATE REDUCTION. So, insurers are able to raise rates on other line items of the premiums – and they are doing just that. In addition, informed consumers are taking out more liability coverage because they understand they CAN NOW BE SUED for the medical expenses of someone else involved in a car crash. In summation, while the PIP portion of your premium may decrease slightly, the other elements that make up your premiums are skyrocketing.

The insurance industry has touted savings of billions of dollars – but this is laughable given that the vast majority of those “savings” did not come from rate reductions or refunds by the insurance companies; rather, they came from a premature and ill-conceived raid on the funds set aside for crash survivors in the MCCA, or as many citizens call it “blood money.”

Overall, consumers are not seeing rate reductions – Michigan rates remain the highest in the nation, and Detroit drivers certainly aren’t winners from the 2019 reforms. We know that people in need of quality rehabilitation and care are suffering, and some are dying because of the 2019 reforms (see this previous Diving Deeper).

Who’s benefitting from reforms? Insurance companies, of course

Who, exactly, are the reforms “working” for? The clear and indisputable answer is the auto insurance industry. They have been able to raise their rates, despite their promises after the 2019 law, and they are off the hook to pay for quality rehabilitation and care for people catastrophically injured in a car crash (despite entering into a contract to do just that) due to the fee cap system.

The insurance industry has had four years to be honest with the public and the legislature about the failures of the 2019 law. Still, instead, they have greedily denied any problems exist and publicly extol the mirage of success of the auto no-fault “reforms” at the detriment of their consumers and car crash victims.

It has been long overdue for our legislative leadership and those in key committee positions to silence their voice and acknowledge that the auto insurance industry has no interest in being part of reasonable solutions to enhance the auto no-fault reforms so that actual cost savings can be realized for consumers and access to quality care guaranteed. Only then can any honest person claim the system is working for all.