Reducing Auto Insurance Rates: A Top Priority

Over the last few weeks, the legislature has been discussing possible changes to the current auto no-fault system. Citizens throughout the state have been voicing their concerns with the costs associated with insuring their vehicles. It has gotten increasingly more costly for motorists in Michigan to insure a vehicle and it is time we do something about that.

Recently there has been a bill introduced in the House, HB 5013, which aims to bring down our rates. There are several different mechanisms aimed to reduce your rates, one of which is a choice of Personal Injury Protection (PIP) coverage. Currently everyone in the state has unlimited medical benefits if catastrophically injured in an automobile accident. I have heard from many constituents who enjoy the idea of having a choice for their PIP coverage. The choices would be $250,000, $500,000 and the unlimited benefits. These options are per person, per occurrence.

Furthermore, in an attempt to keep insurance fraud down, thus lowering our payments, the bill would create a Fraud Authority. The Fraud Authority will provide resources to law enforcement, prosecutors, etc. to combat insurance fraud. In the plan, there will also be reform to the Michigan Catastrophic Claims Association. Every 5 years the Department of Insurance and Financial Services must hire an independent actuary to review the MCCA’s records. If the review shows there is a surplus, the excess must be returned to the customers as a refund. I believe these are very good ideas and will support the creation of a Fraud Authority and Michigan Catastrophic Claims Association Reform regardless if the bill, in its entirety, passes.

While this bill is a good starting point, there are some things I support, and there are a few concerns I have with the legislation as well. The purpose of the legislation is to bring costs down for Michigan drivers. One way of doing that is getting the uninsured to become insured. Will a 40% decrease in PIP costs entice uninsured drivers to become insured? Additionally, something needs to be done about the astronomical rates at which a hospital, or medical facility, charges for patients who have been involved in an automobile accident. These facilities should not be able to charge upwards of 300% of the cost it would be had the person not been in an auto accident.

Again, there are some positives, and some negatives to this bill. I appreciate all of the constituents reaching out to my office and voicing their support, and opposition to the issue. It is important for me to hear from you in order to make a knowledgeable decision when bills like this are brought before me. In an effort to make sure everyone is informed, and has an opportunity to ask questions concerning the legislation, I am happy to be hosting an Auto Insurance Reform Informational Meeting featuring the bill sponsor and Chair of the House Committee on Insurance, Representative Lana Theis. The event will be held at the Plymouth District Library on Monday, October 30 from 6 to 8pm. I hope you’re able to join us in a discussion on this very important topic.