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Can you afford Gov. Snyder’s ‘savings’ from No Fault insurance ‘reform’?

February 17, 2014 by Steven M. Gursten

One year’s worth of $125 in savings won’t make a dent in auto insurance prices, certainly doesn’t  justify the permanent loss of No Fault benefits, per report

No Fault Reform

Can you afford the “savings” on your No Fault auto insurance that Gov. Rick Snyder has promised will result from his plan for so-called No Fault “reform”?

In light of a recent MLive news story about the price of auto insurance in Michigan, the answer is likely “No” for two very good reasons:

  • The $125 or $150 in “savings” for one year that Gov. Snyder has promised (and is specified in his legislative plan, (House Bill 4612) won’t hardly make a dent in consumers’ auto insurance prices.
  • The one year’s worth of “savings” promised by Gov. Snyder does not even  begin to compensate for  the No Fault insurance protections and PIP benefits that consumers will permanently  lose  under Gov. Snyder’s so-called No Fault “reform” plan.

In his article, “Detroit has highest car insurance rates in the country, Grand Rapids is third, website says,”  MLive writer David Muller reported the following results from NerdWallet’s car insurance rate study:

“Detroit ranked first in the country for car insurance cost with an average annual premium of $10,723.22. … Grand Rapids was third at $4,042.”

The study posted on NerdWallet’s website also noted:

“State Farm offers a policy [to drivers in Detroit’s Rosedale Park neighborhood] for $25,300 a year.”

Given those prices, I’m reminded of what Sen. Virgil Smith of Detroit once said.

When Melissa Anders of MLive asked what he thought about Gov. Snyder’s promised “savings” from so-called No Fault “reform,” Sen. Smith said “he’d be ‘laughed out of the room’ if he tried selling the legislation to his constituents on the basis of saving $125 …” (“Proposed no-fault auto insurance changes emerge in Michigan legislature,” 4/23/2012, Melissa Anders, MLive)

At the time, Sen. Smith’s constituents were reportedly paying approximately $6,456 for auto insurance. (“Snyder troubled by Novi’s No. 6 ranking in car insurance rates,” Chad Livengood, The Detroit News, 2/5/2013)

Additionally, Gov. Snyder’s promised one year’s worth of “savings” seem even more “paltry” – as the Detroit Free Press described them in an April 2013 editorial – when the “gain” from those “savings” is contrasted with staggering permanent losses that his so-called No Fault “reform” plan will force on consumers.

The permanent loss of No Fault protections and benefits is detailed in the chart below:


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