Auto insurance reform approved in Michigan House

Local News
cars in traffic

Like Local 3 News on Facebook:

 

The Michigan House has approved a landmark plan to reform Michigan’s auto insurance system and reduce rates for all Michigan drivers.

Rep. Beau LaFave (R-Iron Mountain) voted in favor of the plan to offer drivers personal injury protection (PIP) coverage options, rein in medical costs, and fight fraud – features designed to end Michigan’s long-standing tenure as the state with the costliest car insurance rates in the nation.

“This historic reform has been over 45 years in the making, and I’m honored to deliver real rate savings to the people who deserve it the most – Michigan drivers,” LaFave, of Iron Mountain, said after the vote. “When you look at our neighbors in Wisconsin who pay less than half of what we do for car insurance, you’ve got yourself a $1,000 problem that affects every motorist. Many of our youth have left to escape nation-high car insurance premiums, and it has ripped families apart. Finally, they can come back home. I’m happy to deliver results to all Upper Peninsula families sick and tired of the exorbitant costs.”

LaFave has been a lead advocate for reforms and is a member of the House Select Committee on Reducing Car Insurance Rates Committee – the special panel solely dedicated to crafting a long-lasting solution that cuts down drivers’ rates.

He says Michigan’s costs are high largely because it’s the only state mandating unlimited lifetime health care coverage through car insurance. House Bill 4397 allows people to continue to buy unlimited coverage if they wish– while also providing more affordable options.



The plan:

  • Guarantees lower rates on the personal injury protection portion of policies. It would result in a 100-percent reduction for drivers that opt out of PIP coverage, an 80-percent drop at the $50,000 coverage level, a 60-percent reduction for those purchasing $250,000 in coverage, a 30-percent drop for drivers choosing $500,000 in coverage, and a 10-percent reduction for those buying unlimited coverage;
  • Gives drivers a choice on car insurance policies;
  • Stops price gouging on medical services for car accident victims; and
  • Combats fraudulent claims to help lower costs

The legislation now advances to the Senate for consideration.



Below is a statement from Insurance Alliance of Michigan Executive Director Tricia Kinley on the passage of House Bill 4397.

“We appreciate the leadership of House Speaker Lee Chatfield and Rep. Jason Wentworth as they work to find solutions to fix Michigan’s broken, outdated auto no-fault system. While House Bill 4397 addresses the major culprits driving up the cost of auto insurance in Michigan including fraud and abuse, overcharging by medical providers, and a lack of choice, we have serious concerns with the arbitrary rate and regulatory mandates that will be counterproductive to the goal of saving drivers money. We are hopeful House and Senate leadership can iron out the differences in their two no-fault reform proposals and reach a compromise that will give consumers the savings they deserve without crippling a growing industry in the state.”

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