State lawmakers from Detroit say they will put forth their own package of bills to overhaul m auto insurance in Michigan.
The Democrats oppose Governor Snyder’s plan to cap insurance payouts for catastrophic car accident injuries at $1 million.
Snyder and some Republicans say Michigan’s unique “no-fault insurance” policy bumps up Michiganders’ auto insurance premiums. They say their proposal will bring those rates down by $125 per vehicle for at least one year, with possible future savings.
But members of the Detroit Democratic Caucus say that no-fault is a relatively small contributor to the state’s auto insurance costs—which are among the nation’s highest.
“We believe that that is not the issue,” says State Representative Thomas Stallworth, who chairs the Caucus. “If we’re talking about affordability of auto insurance, we need to be talking about comprehensive liability and collision.”
“We have a rare opportunity to gain some momentum in creating more transparency for the MCCA [Michigan Catastrophic Claims Coalition, the body that administers funds for catastrophic auto injuries], which sits on $14 billion of our money but refuses to open their books,” Stallworth says.
State Representative Phil Cavanagh plans legislation that would “restructure the [MCCA] board with public interests instead of insurance interests," along with other changes. Cavanagh says he believes there is some bipartisan support for more transparency there.
Other lawmakers plan bills that would require insurance companies to justify rate increases, and prohibit insurance companies from “steering” vehicles to collision shops they own.
The Caucus also held an Auto No-Fault Reform town hall meeting in Detroit Monday night.
State Representative Rashida Tlaib says similar town hall meetings have yielded lots of complaints about prohibitively high auto insurance rates, especially in Detroit.
“And even though there might not be an appetite for all the reforms that we want, we still need to educate and really continue the dialogue about the importance of this,” Tlaib says.
According to the Insurance Research Council, roughly 20% of Michigan drivers lack auto insurance altogether. In Detroit, at least half of all drivers are uninsured.