Auto insurance reform plan moves forward

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The folllowing press release is from Senator Ed McBroom’s office.

LANSING, Mich. — A comprehensive plan to lower auto insurance rates in the state was approved on Tuesday, said Sen. Ed McBroom, who voted in support of the reforms.

Senate Bill 1 seeks to revise decades-old laws that have led to increasingly skyrocketing auto insurance rates throughout the state — a recent University of Michigan study indicates auto insurance is unaffordable in 97% of Michigan communities. Under the Senate plan, depending on the choices drivers make, they could save up to 90% on their premiums.

“Drivers in the Upper Peninsula and throughout Michigan are paying the most expensive car insurance rates in the United States,” said McBroom, R-Vulcan. “Our state’s car insurance system is broken, and whether folks live in the U.P., Detroit, or anywhere in between, Michiganders are struggling to afford driving. I am glad that we were able to come together to approve this much-needed legislation to help making driving in our state more affordable.” 

The plan addresses the longstanding problem of costly auto insurance by providing motorists with a choice in the level of personal injury protection (PIP) coverage that best fits their needs; by bringing parity to medical costs paid through auto insurance; by stamping out rampant auto insurance fraud and legal abuses; and by making the Michigan Catastrophic Claims Association more transparent and accountable.

“Giving people a choice in what they buy is just common sense,” said McBroom. “I am also pleased that, under this reform, people who already have health insurance plans that cover auto-related injuries and those on Medicare and Medicaid will be able to forgo the mandated PIP coverage, ending the unfortunate symptom of people essentially being double charged for medical coverage.”

McBroom also highlighted the medical cost savings that are included in the legislation.

“Right now, health care costs for auto insurance claims are grossly more expensive than what other insurance providers pay for literally the exact same care. What’s more, this inexplicable and ridiculous price hike just gets passed on to drivers in the form of a higher auto insurance bill,” McBroom said. “This plan will end that by bringing auto insurance prices in line with health insurance prices, as they should be.”

To help stamp out fraud and abuse, the Senate plan includes the creation of an anti-fraud authority to be operated by the Michigan State Police to help combat the problem statewide.

“The current system of auto insurance in our state has led to rampant fraud, abuse and conflicts of interest, and it’s getting worse,” McBroom said. “Fraud only adds to the rising costs of our auto insurance rates and we must put a stop to it.”

SB 1 now advances to the House of Representatives for consideration.

“This is a real, lasting solution that will significantly lower auto insurance rates for all Michigan drivers, now and in the future,” McBroom said. 



State Rep. Beau LaFave, member of the House Select Committee on Reducing Car Insurance Rates, today issued the following statement in response to the Michigan Senate approving no-fault car insurance reform:

            “I applaud the Senate for moving on a bill to solve Michigan’s car insurance nightmare, and was honored to be on the floor behind our great senator as the historic vote took place. Delivering genuine reforms that reduce car insurance rates once and for all is unquestionably one of my biggest priorities – a priority shared by Michigan drivers. The Senate-approved plan has many great components, all capable of reducing car insurance rates for Michigan families. While this may not be exactly what passes the House, I support this bill and am so glad we’re moving forward on such a great framework. I look forward to working with my House colleagues to review the proposed legislation in depth, and represent the Upper Peninsula’s voice as we deliver results – together – for the people of Michigan.”

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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