Michigan auto insurance reform creates ‘unintentional’ price spike

Lansing — The Michigan Legislature on Tuesday approved a “technical fix” that would prevent a one-year auto insurance price spike under a recent reform law intended to reduce rates that routinely rank among the highest in the nation.

The law, as signed last week by Gov. Gretchen Whitmer, requires auto insurers to reduce personal injury protection premiums by July 2020, when motorists will be given the choice to purchase plans with less medical coverage than unlimited lifetime benefits.

But the law also requires that insurers increase automobile liability coverage for bodily injury, and that provision was “unintentionally” written to take effect immediately, Senate Majority Leader Mike Shirkey, R-Clarklake, told reporters after the proposed amendment cleared the upper chamber in a 33-4 vote.

“It was just an unintentional thing,” Shirkey said. “And actually, if we’d had let it go, it would have actually increased your insurance costs today, which is not what we were trying to achieve, of course.”