May 10, 2019
By Pat Maurer
Breaking news Thursday morning on 9&10 News announced that the Michigan House, in an early morning vote, has approved a measure overhauling Michigan’s auto insurance system.
The House legislation would reduce vehicle insurance by hundreds of dollars, require insurance companies to reduce insurance prices for the next five years and allow insurance companies to offer lower medical coverage options.
The House bill follows a Senate plan approved Tuesday morning that would no longer make Michigan the only state to require drivers to pay premiums for unlimited medical benefits to their auto insurance provider, dismantling the no-fault insurance program in Michigan.
They approved it early Tuesday morning, but Governor Gretchen Whitmer said just hours later that she would veto this version of the bill.
“Today’s action by the Senate creates more problems than it solves. It preserves a corrupt system where insurance companies are allowed to unfairly discriminate in setting rates and the only cuts it guarantees are to drivers’ coverage,” Whitmer said in a statement. “I am only interested in signing a reform bill that is reasonable, fair and protects consumers and this is not it. If this bill comes to my desk, I will veto it.”
Under the Senate bill, insurance costs would go down about $150 a year according to several news sources.
The House plan, which Republicans say could reduce rates by amounts from $120 to $1,200 annually, includes eliminates the state’s requirement for unlimited medical coverage and includes changes for new coverage levels, the 9&10 News post said Thursday morning. Under their measure the Department of Insurance and Financial Service would create rules on discriminatory rates for drivers, which increase their insurance costs.
9&10 News reported Tuesday evening, “Michigan auto insurance is expensive, 83% higher than the national average. There are no guaranteed rate reductions past the catastrophic injury coverage and that’s an issue for most Democrats. They want more accountability and cost savings instead of passing the buck to someone else.”
Campaign promises last fall promised lower auto insurance rates. 9&10 reported, “On its face this [Senate] bill would do just that. But opponents say that’s letting auto insurance companies off easy and puts the stress and financial burden on healthcare, Medicare and Medicaid.
The Senate plan would have ended personal protection coverage if drivers have other qualifying health insurance. It would also reduce the amount medical providers charge auto insurers for medical care, now much more than health insurers pay for the same care.
A March 13th article by Emily Delbridge of Thebalance.com said, “Michigan is the truest no-fault state in the country. The term no-fault means that your own insurer will be responsible for recouping your losses, rather than the insurer of another party. It doesn’t matter who was responsible for the accident, hence the name “no fault.”
She added, “Michigan is the only state that extends unlimited medical coverage for all insured drivers. Michigan’s no-fault auto insurance law is one of the most complicated in the U.S. to understand. Michigan has several irregular coverages that other states do not require. Michigan’s no-fault laws have both pros and cons, with the biggest con being the much higher overall cost than drivers in other states regularly have to endure.”
She continued, “Unlimited medical coverage is provided for Michigan car accidents under the Michigan Catastrophic Claims Association (MCCA). Even though it was created by the state, the MCCA deals directly with insurance companies rather than drivers and hospitals.”
She also said, “In the state of Michigan, property protection insurance provides one million in coverage for property damage [but the] coverage is only provided if the accident takes place in Michigan.”
The rising costs of auto insurance in Michigan, the highest in the nation, prompted the legislation because many people simply can’t afford to drive, or drive uninsured because of the costs.
Now the proposed changes will be up to the Senate. If the House measure passes there it will go to Governor Whitmer for her approval.