Actually this does not bother carriers at all. The State recognized that this was not competitive after the "NO FAULT" law was established in the late 1970's. Michigan created a Fund called the MI Catastrophic Claims Association where carriers could get relief on claims over $250k, Meaning they no longer would have to price....UNLIMITED and had a fixed number to price the PIP product on.
Each vehicle insured pays into the fund as part of the PIP premium and Currently it is about $170/year. It has been as low as $30/yr as in the late 90's and early 2000's when the fund had a huge surplus and at that time MI was in the top 5 States with the lowest Rates and companies were flocking to this State and expanding.
Actually this system was used by my group to introduce Health Care Reform in 2009 as a successful example on how to use Gov't for Catastrophic Care and the private markets for every day care (High Deductible Mini-Meds with Catastrophic Care and HSA Plans).
We showed that using a $25k Deductible per person and $50k per family and $50k/$100k models would have covered 97% of all claims in 2007 and would have reduced overall costs in the Health Care System. Implementing the plan would have a 1.2% and 0.8% payroll tax, sufficient to cover the catastrophic care. Also, this plan would cover 75% of the current (2009) 33 million uninsured.
Problem was that our plan made sense and was simple and low cost to the consumer and businesses. Something that does not make any sense to a politician..... Oh Well....
Skipper.
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