Michigan auto insurance premiums are
higher than the national avg.Source: Car insurance rates by state, insure.com, 2015
Detroit drivers could save over
off their PIP premiumSource: Pinnacle Acturial Resources, Inc., 2015
Medical claims cost auto insurers
more in MichiganSource: Citizens Research Council of Michigan, 2013
Right now, studies indicate that Michigan physicians who treat drivers with car accident-related injuries charge auto insurance companies up to 400% more than similar physicians rendering the same treatment in Pennsylvania and New Jersey (two largely populated and no-fault states). Why? Because they can. With a PIP cap, physicians in Pennsylvania and New Jersey collect additional medical expenses from health insurance companies which use negotiated fee schedules and prevent over billing.
This law would not affect the quality of auto insurance offered to Detroit drivers. Instead, it would introduce a new option for drivers in Detroit. D-Insurance would allow a cap on the amount payable by your auto insurance company to health care providers as well as make available a trusted group of health care providers who would follow a fee schedule to charge for medical care related to auto accidents.
Pinnacle Actuarial Resources, Inc., an independent actuarial and management consulting firm, conducted a comprehensive study to assess the impact of this new law and determined that the rates for PIP coverage alone would be reduced by 55.3% for Detroit drivers.
Data from Independent Statistical Service, Inc. (ISS), Inc. shows that auto insurers pay out $1.28 in claims for every dollar of premium collected for PIP coverage in Detroit – that's a 28% loss for PIP coverage on every policy. While the rates for car insurance in Detroit are unaffordable and excessive, car insurance companies are still losing a large amount of money for every policy they write in Detroit. The fact that PIP coverage is both expensive for drivers and unprofitable for insurance companies is the reason there is an auto insurance crisis in Michigan.
*Calculations based on potential savings for a liability only policy as determined by Pinnacle Actuarial Resources, Inc.
It's not news that Detroit has some of the highest auto insurance rates in the country. Certain health care providers have been grossly overcharging auto insurers for medical care related to auto accidents which has led to a system where drivers can't afford insurance and auto insurers are blindly billed. When you consider that many more Michigan drivers are now paying for duplicate catastrophic medical coverage due to the Affordable Care Act, it's easy to see how the cost to live in Detroit is stifling the growth of the city and the entire state of Michigan.
We all know that government only responds when they hear your voice. Use the form below to find your local congress person and send them an email to help D-Insurance become law.