Michigan No-Fault Reform Yields Fewer Claims, Lower Premiums

Michigan’s no-fault system reform law, effective in 2020, has led to personal auto insurers paying out fewer claims and many drivers paying less in premiums, according to recent research by two Triple-I nonresident scholars.

The study, No Fault Auto Insurance Reform in Michigan: An Initial Assessment, co-authored by Patricia Born, Ph.D. of Florida State University and Robert Klein, Ph.D. of Temple University, observed substantial decreases in average liability premiums and personal injury protection (PIP) loss costs in 2022. PIP covers the treatment of injuries to the driver and passengers of the policyholder’s car in a no-fault auto insurance system.

‘Our initial evaluation of the likely effects of the reform legislation indicates that it is significantly reducing the costs of auto insurance for many Michigan drivers,’ the paper states. ‘How much these reductions will be for any given driver will depend on the PIP option they choose, among other factors.’

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