Everyone in Michigan is forced to pay for the nations most expensive auto insurance. We had a plan to take care of people after they are injured by having an unlimited length of care available, our current no-fault system. Enter in the healthcare industry who is known to charge $800 for an $8 bag of saline and its easy to see where costs are heading. After multiple failed attempts to make changes to Michigan’s costly no-fault auto insurance system, the state Senate took another crack right before it broke for its 10-week summer recess.
The biggest change would allow insurance companies to offer senior citizens two options for auto insurance coverage: $50,000 in coverage for health care costs and then their Medicare insurance would kick in — an option that would be cheaper — or the current unlimited lifetime benefits for people critically injured in car crashes offered through the Michigan Catastrophic Claims Association.
"I would like to be standing up here talking about auto insurance reform for everyone. Unfortunately the House (of Representatives) hasn’t been able to find the votes, so let’s start with the seniors," said Sen. Rick Jones, R-Grand Ledge. "Many of the seniors in my hometown drive to their church, doctor and grocery store. They should be able to get lower rates. We’re pricing them out of auto insurance."
But Democrats said the bills, which passed on votes of 23-13, didn't go far enough and failed to offer a comprehensive approach to lowering Michigan's highest-in-the-nation costs for auto insurance. Four Republicans — Sens. Mike Kowall of White Lake, Mike Green of Mayville, Tory Rocca of Sterling Heights and Dale Zorn of Ida — joined all the Democrats in opposing the bills.
"Instead of taking the easy way out by doing something just to get something done, why not get our hands dirty and finally get some work done?" said Sen. Morris Hood, D-Detroit. "The smoke and mirrors just don't work for me."
They offered amendments that would require guaranteed savings of at least 10% in auto insurance rates and tie the bills to ones they've introduced that would prohibit auto insurance companies from using non-driving related factors, such as credit scores and ZIP codes, to determine rates. Those amendments failed.
Instead, the only guaranteed savings would be for seniors who choose the $50,000 coverage option because they wouldn't have to pay an annual $160 fee to the MCCA.
"It's a step forward that our citizens desperately need," said Sen. Joe Hune, R-Gregory, adding it's extremely difficult to accomplish comprehensive reform. "There is so much money to be made in this system ... when you're talking about hundreds of interest groups and dozens and dozens of lobbyists, it seems like they stymie any bit of significant progress we can make because it's easy, when you have a large piece of legislation, to find a way to vote no."
The last time the Legislature tried to pass auto insurance reform in November, the House of Representatives failed to get the votes necessary to pass a plan pushed by Detroit Mayor Mike Duggan that would have offered guaranteed rate reductions for lower levels of coverage without lifetime benefits.
As we watch and listen, Lansing will once again attempt to help ease the burden on Michigan drivers. It has become even more important to understand your auto policy and to check with your agent to see if there are options available to offset the ridiculously high rates forced upon you.
-Verify you have the correct Personal Injury Protection
-See if raising your PIP deductible would lower your premium and be a suitable compromise
-Check additional companies as rates are always changing in different areas of Michigan
-Keep your agent aware of any changes to drivers, garaging addresses, and use of the vehicle(s)
-Finally, ask if there are discounts that you are not receiving, and how to qualify for them
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