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Community leaders, lawmakers concerned about Whitmer-endorsed car insurance bill

Posted: 6:42 AM, May 29, 2019
Updated: 2019-05-29 10:42:01Z

(WXYZ) — A group of community leaders and state lawmakers from metro Detroit spoke out against the new auto insurance reform bill that Governor Whitmer is expected to sign.

Opponents are calling the bill a "fairy tale" and something that won't truly address the problem."

The "Real Deal" Coalition is warning that insurance companies will still be able set excessive rates based on territorial and credit factors under the bill. They claim people in cities like Detroit, Dearborn, Hanmtramck, Inskter and Highland Park are all still at risk for higher rates.

On May 24, the state House and Senate passed the reform bill, sending it to Gov. Whitmer to sign.

Under the new bill, drivers will be able to choose whether they want unlimited coverage or even no coverage at all. If they choose no personal injury protection coverage analysts say drivers will save on average $1,200 a year. If they choose to keep unlimited coverage they will save $120 a year due to new limits on how much health care providers can bill insurance companies.

A driver choosing to stick with unlimited coverage would see a 10% PIP reduction. Someone who fully opted out would get a 100% cut, if they have health insurance. People on Medicaid would have to get at least $50,000 in benefits and would pay 45% less. People picking $250,000 or $500,000 of coverage would see a 35% or 20% reduction.

Additionally, the measure also would prohibit the use of several non-driving factors in setting rates and scale back reimbursements for health providers that treat accident victims. Unlike several other no-fault states, Michigan does not have a fee schedule for care covered by auto insurers. They pay much more for the same services than is paid by employer plans or government insurance such as Medicare or Medicaid.

The rollback in PIP rates would start in July 2020 and last for eight years.