Michigan's 2019 no-fault auto insurance reform was the most significant overhaul of the state's insurance market in decades. A state-commissioned Milliman analysis published in December 2025 estimated it saved drivers an average of $357 per year compared to what they would have paid without the changes - with Michigan's average auto insurance costs moving from worst in the nation to no longer the most expensive, as states including New York, Louisiana and Florida have since surpassed Michigan's average premiums. Now, a Democratic-sponsored bill requiring a mandatory 10% premium cut is testing whether that progress holds.
Senate Bill 328, introduced by Sen. Jeff Irwin (D-Ann Arbor) and passed by the Senate Committee on Finance, Insurance and Consumer Protection on a 5-3 partisan vote, would require any insurer issuing or renewing an auto policy to reduce total premiums by at least 10% without cutting benefits. A companion measure, SB 329, would prohibit reinstatement fees or higher rates after a coverage lapse. The bill has yet to receive a full Senate floor vote.
Irwin, who notably voted against the 2019 reform, has argued the legislation is needed to address soaring insurer profits at consumers' expense. "Car insurance rates in Michigan are too high," he said when introducing the bills. "Insurance company profits are soaring, along with our costs as consumers. It's time for the Legislature to stand up to these unjustifiably high car insurance rates."
According to Bankrate, Michigan drivers pay 63% more for car insurance than those in Wisconsin, 82% more than Indiana residents, and 96% more than Ohio drivers, as of January 2025.
The American Property Casualty Insurance Association called on senators to reject the bill, arguing it ignores underlying cost pressures while imposing a rate cut the market cannot absorb.
"Michigan drivers don't need market manipulation — they need solutions that actually work," said Joe Roth, APCIA assistant vice president for state government relations. "This bill ignores the root causes of rising costs and instead imposes a policy that has consistently failed in other markets."
The association cited NAIC data showing Michigan insurers still pay out $1.04 in claims and expenses for every $1 collected in premiums - a loss ratio that directly contradicts the soaring profits framing and represents the most significant data point in the debate. APCIA also cited AM Best research finding that average personal auto insurance premiums in Michigan fell 12% between 2019 and 2022 following the no-fault reform, while the national average rose 5% over the same period.
The underlying cost pressures APCIA identifies as the real drivers - inflation, rising vehicle repair costs, supply chain disruptions and litigation costs - are not unique to Michigan. The national average car insurance premium is 55% higher than pre-pandemic levels, according to the US Bureau of Labor Statistics, giving context to the rate increases Michigan drivers have experienced since the initial post-reform dip.
APCIA pointed to California's insurance market, which has experienced insurer exits and coverage shortages following years of strict rate controls, as a cautionary example. "Now is not the time to put Michigan on the same path toward a disrupted insurance market like California," Roth said.
The debate is complicated by the fact that the 2019 reform's impact is itself contested. While the Milliman report shows premiums dropped year-over-year from 2019 to 2022, average Michigan auto insurance premiums in 2024 were roughly $200 higher per car than they were in 2019, with rate hikes in 2023 and 2024 eroding earlier gains. Critics including the Consumer Federation of America have argued the reform reduced coverage for some drivers without delivering lasting affordability.
That contested record gives both sides of the SB 328 debate legitimate ground to stand on - and makes the outcome of the Senate floor vote a meaningful indicator of whether Michigan's legislature views market-based reform or direct rate intervention as the more credible path to affordability.
Rather than mandated cuts, APCIA is calling on lawmakers to pursue fraud crackdown, litigation reform and measures to promote competition - the same structural arguments that underpinned the 2019 reform and that the industry argues remain unfinished.
