FOR IMMEDIATE RELEASE: November 12, 1997

Thanks to Michigan's no-fault auto insurance law, owners of sport utility vehicles (SUV) will not be hit by the insurance rate hikes occurring in many states, said Governor John Engler today.

Recent news stories reported that liability insurance for these vehicles will rise significantly, because they are involved in more accidents that cause increased injuries and subsequent losses under the liability coverage. In many states, the at-fault driver can be sued for expenses related to injuries from an auto accident, such as doctors' visits and medications. Payments to the injured person come from the at-fault driver's liability coverage.

"Under Michigan's no-fault law, in most instances the driver responsible for the accident cannot be sued for medical expenses," Engler said. "The injured person's own auto insurance policy will pay all necessary medical and rehabilitation expenses, as well as three years' replacement services and wage loss benefits."

A Michigan driver can't be sued for someone else's medical expenses, so insurers in the state do not price liability coverage according to the vehicle a person drives. Collision and comprehensive coverages do vary by vehicle, however, because these coverages pay if the vehicle itself is damaged or stolen, its value and repair cost have a significant impact on premiums.

"It is because of our unique no-fault law that the two large insurers who announced the change in calculation of car insurance premiums for SUVs in other states have not done so in Michigan," said Acting Commissioner of Insurance D.A. D'Annunzio.