Free Pass for Michigan’s Uninsured Motorists Ends January 1, 2022

Published on December 20th, 2021

uninsured motorist coverage thurswell lawIn July 2020, a financial amnesty period began in Michigan to shield drivers who let their car insurance lapse. Under this rule, they would not face expensive penalties or higher premiums when finally trying to purchase auto insurance. But that will all change on January 1, 2022, when the financial amnesty period ends. Anyone driving illegally without auto insurance is urged to sign up for coverage soon.

All About the Amnesty

The financial amnesty for uninsured motorists was part of Michigan’s no-fault insurance overhaul. It was aimed at lowering the state’s highest-in-the-nation auto insurance rates – the rates that discouraged so many drivers from purchasing covering for their vehicles.

Before the overhaul, it is believed that an estimated 20% of people in Michigan and 60% of people in Detroit were driving without auto insurance. In some ways, this is understandable – Detroit residents paid the highest insurance rates in the state, sometimes over $3,000 per vehicle per year. This kind of coverage is simply unaffordable to many people, even those who have always done their best to follow the law and get the required coverage. The numbers were simply too high.

What Should You Do Now?

With just over one week to go before the financial amnesty ends, the only choice that motorists have is to buy their coverage immediately. “If you wait, you’ll pay more,” said Anita Fox, the director of the Michigan Department of Insurance and Financial Services. The amnesty was intended to give motorists a financial break, but the deadline for taking advantage of it is fast approaching.

According to Fox, the financial penalties for uninsured drivers who wait too long and miss the amnesty period will face financial penalties from the insurance company, but these will vary by circumstance and insurer. “They can refuse to insure you, maybe push you into a high-risk pool,” said Fox. “It really depends on an individual driving situation… but it can be significant and it’s really kept some people from getting back into the insurance market.”

Benefits of the Financial Amnesty

The no-fault overhaul offered consumers new, affordable choices, and many residents are benefitting from them, saving thousands of dollars a year on car insurance. One resident said she used to pay almost $500 per month to insure just one vehicle before the new system took effect in 2020. Sometimes she drove without insurance. But, under the financial amnesty, she has three vehicles on her policy and pays just under $300 per month for all three.

Sound too good to be true? Maybe. Under the plan, you have to make compromises. This motorist managed such a reasonable monthly payment because she chose the $0 personal injury protection (PIP), which means she only has her health insurance to rely on if she’s in a car accident. She didn’t feel she needed double coverage in that area since she has health insurance through her employer.

Protect Yourself from Uninsured Motorists

Since July 2020, over 100,000 previously uninsured Michigan motorists have purchased car insurance – nearly 66,000 of them had been driving without insurance for three years of more, according to the Insurance Alliance of Michigan.

If you are involved in an auto accident with an uninsured motorist, contact Thurswell Law to schedule a consultation and find out how we can get you the compensation you deserve. Call us at (248) 354-2222 today. We do not charge any fees until we win.

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