Michigan's law currently provides unlimited medical care under personal injury protection (PIP) coverage.

HB 4936 also establishes a fee schedule in hopes of bridling costs. A fee schedule exists for the state's workers' compensation system.

The insurance industry in Michigan says it is looking to stabilize the state's no-fault automobile system before costs get out of control.

The average cost per claim has increased nearly 170 percent over the last decade to $36,245 from $13,617 in 2000, says the Insurance Institute of Michigan.

"The current system with its uncontrolled medical costs and mandated benefit that doesn't allow consumer choice will simply put Michigan behind for business growth and continue to drive costs up for both consumers and insurers," Collins continues.

David Snyder, vice president and associate general counsel of the American Insurance Association, urges the House committee to consider reforms to "reverse the current slide into a 'death spiral' of rising costs, rising premiums, rising affordability problems and rising anger from the public." He says HB 4936 constrains costs while keeping the benefits of the no-fault system.

Snyder says several states have repealed no-fault laws, Florida is considering it and New Jersey struggled for decades to reform its system. Michigan will face similar calls to repeal the entire system if it does nothing to fix it now, he adds.

"My experience is that every case of repeal or near appeal in which I have been involved, was preceded by extensive efforts to achieve moderate reforms that failed," he says. "Without those reforms, costs continued to rise as did public anger and repeal because the preferred option."