No Fault Reform – How Much Will I Save

Time for another installment of our No-Fault reform email series.  We’re going to try to answer the million dollar question: how much money will I save?!

There are two ways you’re going to save money on your auto insurance renewal after July 2, 2020:

  1. The state mandated MCCA fee is being reduced.  Anyone keeping unlimited medical coverage will see this fee reduced from around $220 per year per car to $100 per year per car.  Anyone electing less than unlimited coverage will see this fee go from $220 per car per year to $0. So anywhere from $120 to $220 per car per year savings. That’s significant!
  2. Your personal injury protection line item cost should be reduced.  That says “should” because it’s case by case and the insurance companies haven’t filed all of their rates yet. The new law said there had to be an ‘average’ decrease, not a decrease for every policyholder.

What’s been overlooked by the media, but is vitally important in the savings discussion, is the introduction of medical related tort in our auto insurance system.  Since No Fault was enacted, you have not been able to sue the other party for uncovered medical expenses – there were no uncovered medical expenses. Now if you injure someone who has less than unlimited medical coverage it is VERY likely you will be sued for their uncovered medical expenses.  The impact of this will be that your bodily injury liability premium on your policy will increase. Most projections indicate the long-term increase will outweigh the savings on the personal injury protection line item.

So let’s simplify this.

It’s likely the majority of policyholders will save money.  But most of that savings will come from the MCCA fee reduction, not the reduction of personal injury protection costs. That decrease is expected to be offset by increases in legal action and subsequent bodily injury liability limit cost increases. 

Up next in our series, So What Should I Do?!  Read that here:

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Are you ready to save time, aggravation, and money? The team at Brouwers Agency is here and ready to make the process as painless as possible. We look forward to meeting you!

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