Michigan launches consumer website, hotline for new auto insurance questions

Feb. 5--LANSING -- Michigan's insurance director said Tuesday that a new consumer-focused website and hotline are now live to help prepare for the revamped auto insurance system that begins in July and will offer drivers new choices -- and potentially cheaper rates.

In anticipation of the new system, more insurance carriers are applying to offer auto policies in Michigan, which increases competition and grows the total number of authorized auto carriers to more than 100, said Anita Fox, director of the Department of Insurance and Financial Services.

Starting July 2, Michigan drivers will have a first-ever option to buy less no-fault medical coverage with their auto policies or continue with the potentially unlimited, lifetime medical benefits that are currently mandatory.

The new website, www.michigan.gov/autoinsurance, offers explanations of the coverage options, shopping tips and details on the new system. The new hotline number is 833-ASK-DIFS or 833-275-3437 and consumers can email questions about auto insurance to [email protected].

"This system has been in place for a long time and none of us have had to think about this at all," Fox said in an interview with reporters. "Because we have choices now, It's going to require a level of education."

Many drivers are expected to see lower auto insurance rates under the new system, particularly those in urban areas such as Detroit where no-fault's medical benefits, known as PIP or personal injury protection, can represent as much as 50% or more of a policy's price.

Drivers who have private health insurance will want to learn whether that health policy covers auto accident injuries. If so, they will have the choice of opting out of PIP and relying completely on their health insurance after a crash.

Most health insurance plans no longer have lifetime limits. However, no-fault medical benefits cover things that even the best health insurance plans don't, such as extensive in-home attendant care, lost wages replacement, home and vehicle modifications and long-term custodial care in specialized rehabilitation centers.

"Unlimited lifetime benefits (for auto) may be great for some families," Fox said. "There are many families who couldn't afford that, were going without (insurance) or were making economic choices to comply with the law and having to forgo other maybe necessary things for their families."

Fox said that her office has hired outside actuaries to help ensure that insurance companies are complying with the new system's rules and giving consumers the mandatory eight years of guaranteed savings of between 10% and 100% off the PIP portion of their polices.

The new system will also forbid insurance companies from using some non-driving factors when setting rates, such as a driver's occupation, education credentials and whether they own a home.

Fox said that a half-dozen or so auto insurers have applied to start selling policies in Michigan in time for the new system's July start. There are more than 100 authorized auto carriers.

"The more the merrier," Fox said.

Choices to make

Starting July 2, Michigan drivers who are on Medicare or have commercial health insurance that covers car crashes (and with a per-person deductible no higher than $6,000) can choose to completely opt out of no-fault medical benefits.

Other drivers will be required to purchase some no-fault medical coverage, known as personal injury protection or PIP, with their auto insurance. They can pick from several options:

-- $250,000 in no-fault medical benefits.

-- $500,000 in no-fault medical benefits.

-- Unlimited no-fault medical benefits.

-- $50,000 in no-fault medical benefits -- but only for those on Medicaid.

Contact JC Reindlat 313-222-6631 or [email protected]. Follow him on Twitter@jcreindl. Read more on business and sign up for our business newsletter.

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