In an effort to address the problem of excessively high auto insurance rates in Detroit, SB 288 was recently introduced by Senator Virgil Smith. The Senate Insurance Committee passed two amendments to this bill, which is currently referenced as SB 288 (S-3). This bill gives Detroit
residents, as well as residents of any city where more than 35% of its residents are uninsured, the option to purchase a stripped-down auto no-fault insurance policy that is not legal to sell to any other Michigan citizens. This type of substandard no-fault policy is referred to as a
“Qualified No-Fault Policy.”
These substandard no-fault policies contain drastic limitations in coverage and benefits compared to that which is available under a traditional Michigan no-fault insurance policy. That means people insured under these substandard policies will have second-class auto
insurance compared to other Michigan citizens. Moreover, such policies are likely to have significant negative consequences statewide. The main features of SB 288 (S-3) are described in this summary.
