Posted: Dec. 1, 1989
   
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Auto Insurance in Michigan: Regulation, No-Fault, and Affordability




 

IV. Preserving and Improving No-Fault

Michigan's no-fault law combines comprehensive personal injury protection benefits with the most effective limitation on tort liability of any no-fault law in the nation. A recent study of 46,000 countrywide claims closed in 1987 indicated that only 12 percent of bodily injury related claims in Michigan would be likely to satisfy the threshold for tort liability. [59] While double the 6 percent figure obtained in a comparable study of claims closed in 1977, the percentage for Michigan was still well below the average of 39 percent for all states with no-fault and the percentages for New York (29 percent) and Florida (33 percent), the other two states with verbal thresholds. Studies also suggest that overall premiums for bodily injury related coverages in Michigan are significantly lower than would have been the case if no-fault had not been adopted. [60]

Despite the overall success of the law, there exist a number of ways in which the no-fault system could be improved to benefit Policyholders and to mitigate auto insurance affordability problems. Personal injury protection costs have increased rapidly in recent years, and the effectiveness of law's threshold for tort liability for noneconomic loss has been eroded by judicial interpretation. [61]

Publication: Study

Next page: The Case for No-Fault: A Review

This text is part of the larger publication:
Auto Insurance in Michigan: Regulation, No-Fault, and Affordability


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Friday, December 5, 2008
Thanks for the Memories
A tribute to President Emeritus Lawrence W. Reed.

 

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