One of the Big stories in Lansing over the last few weeks has been Mayor Duggan’s plan to cut auto insurance affordable for residents of The City of Detroit. I live in Detroit and I know first-hand the high cost of auto insurance in the city, but what benefits will residents be giving up in exchange for this break in insurance costs?

The headlines are flashy, 26-37% reduction in Auto-Insurance Costs, but the insurance companies haven’t agreed to cut rates out of the goodness of their heart, theses reductions are in kind for subscribers agreeing to receive fewer benefits in the event they are injured in an auto accident. I’m going to save for later a discussion my personal feelings on the D insurance bill. For this article I’m just going to lay out the facts, what the proposed insurance plan covers, and what it doesn’t.

Michigan’s current No-Fault Law requires that insurers provide lifetime medical benefits to covered individuals injured in auto accidents. For a full rundown on Michigan No-Fault coverage see our earlier article Michigan No Fault Benefits. In exchange for these flashy rate reductions D-Insurance subscribers will be giving up these lifetime benefits in-favor of a benefit cap. This cap operates exactly like it sounds, the auto insurer will pay benefits up to the amount of the cap, but will no longer be responsible for any treatment above that amount. For minor accidents, this may not have much effect, but the implications on victims of serious auto accidents, especially those sustaining injuries to the head or spine.