Don't redo your budget just yet, but a new proposal in Michigan may lower your car insurance rates anywhere from 20% to 50%. Motorists in Michigan are required to purchase insurance that carries unlimited medical benefits.

A plan unveiled today in Lansing would abolish the unlimited-benefits requirement, and allow drivers to purchase insurance that would limit medical benefits to $250,000 or $500,000. Motorists would still have the option to purchase unlimited-benefit policies.

Here's information from a news release from the Michigan legislature:

Michigan House Speaker Tom Leonard, state Rep. Lana Theis and Detroit Mayor Mike Duggan today announced a plan to reduce Michigan drivers’ car insurance bills an average of 20% — and even more for seniors — bringing significant relief to residents paying the nation’s costliest insurance premiums.

The bipartisan legislation to reform Michigan’s no-fault insurance laws is sponsored by Theis, R-Brighton, and backed by Leonard, R-DeWitt, and Duggan, a Democrat. The plan would end Michigan’s only-state-in-the-nation requirement that all drivers pay for unlimited lifetime health insurance through their auto insurers, no matter whether they already have health care coverage. Drivers who want to keep unlimited health care specifically through an auto insurance company could continue to do so.

This new plan would preserve the most generous auto insurance coverage in the nation, while driving down health care costs, rooting out fraud and abuse and reducing the rapidly growing number of lawsuits statewide that Michigan’s 1973 no fault law was supposed to prevent. The plan gives drivers options for lower rates and greater choice based on what they can afford.

“Everywhere I go traveling the state, people are demanding relief from their out-of-control auto insurance rates,” said Leonard. “Michigan drivers are paying the highest rates in the country because we are the only state that requires everyone to buy bonus medical plans many don’t want and others don’t need.  The families who are trying to make ends meet with this extreme burden deserve better.  They deserve a plan that makes bold, long-term reforms.  They deserve a plan that puts people first, not hospital lobbyists or insurance companies.  They deserve a plan that will finally deliver real rate relief.”

Michigan drivers pay the nation’s highest auto insurance premiums, averaging $2,400 a year, according to, nearly twice the national average of $1,318. In the second highest state, Louisiana, premiums average $1,921.

“It’s clear that no-fault is collapsing and not doing what it was designed to do, and that’s costing Michigan drivers dearly,” Mayor Duggan said. “People are paying too much, forcing them to cut back on other necessities so they can afford to drive. It leaves too many people driving uninsured or unable to drive at all because their insurance costs more than their car payment.”

“Our plan provides affordability, flexibility and freedom for Michigan motorists,” said Theis.  “Michigan’s current no-fault system is No. 1 for all the wrong reasons. It’s time to let hard-working families and seniors choose their own PIP coverage level, saving hundreds of dollars on their premiums each year.”

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