Michigan lawmakers target no-fault auto insurance law in push to cut high rates

Beth LeBlanc
The Detroit News
Michigan legislators are aiming to reform Michigan's no-fault insurance law and its nation-leading rates stemming in part from policies for car accident injuries.

Lansing — Michigan Senate Republicans on Tuesday introduced a statement bill signaling intent to reform the state’s no-fault auto insurance reform law, using their first proposal of the two-year session to renew calls to reduce rates.

House Republicans also are set to aggressively target auto insurance reforms and on Monday announced plans to create a temporary special committee to consider options. 

Senate Bill 1 does not include specific reform proposals but will serve as a starting point for future negotiations on how to cut rates that regularly rank among the highest in the nation.

“The singular goal here is to reduce auto insurance rates across the state,” said Amber McCann, a spokeswoman for Senate Republicans, who have a 22-16 majority over Democrats.

Sen. Aric Nesbitt, a Lawton Republican who helped shepherd major energy policy legislation through the House in late 2016, will lead the auto insurance reform push this term in the upper chamber. 

Debate is expected to include past proposals to create a no-fault fee schedule for hospitals, eliminate a unique mandate requiring all auto insurance plans to guarantee unlimited lifetime medical benefits and instead give motorists the option to choose reduced-price, reduced-coverage policies. 

“Everything needs to be on the table as we begin this,” Nesbitt told reporters. "I'd like to see some choice provided to drivers. I’d like to see ways to control costs to make sure that we’re … making our rates more affordable.”

Democratic Gov. Gretchen Whitmer, with whom Republican legislators will have to work on any major reforms, also vowed to address the state’s high auto insurance rates as part of her campaign plan to fight urban poverty. The state must prohibit “redlining” by prohibiting insurers from setting rates based on geography and other non-driving factors, Whitmer said.

Attorney General Dana Nessel, who also took office Jan. 1, on Tuesday announced creation of a new Auto Insurance Fraud Specialist position in her office and named Keisha Glenn to the post. The Detroit native “spent six years fighting against auto insurance fraud in metro Detroit” as an attorney at Hackney Grover, PLLC and Scarfone & Green, P.C., Nessel’s office said.

The GOP legislation introduced Tuesday is heading to the Senate Insurance and Banking Committee, chaired by Sen. Lana Theiss, R-Brighton, who led reform efforts in the House last session but did not take up Democratic bills to address redlining or non-driving rate factors.

"I am hoping, as the Democratic vice chair (of the committee), that we will have a much more robust conversation around all of those issues," said Sen. Erika Geiss, D-Taylor.

"I think we need to do much better about making sure that people understand what the factors are that lead to having such high rates here and mitigating those issues," Geiss said.

Republican Sen. Pete Lucido of Shelby Township on Tuesday introduced a separate series of auto insurance reform proposals, including bills to require more transparency and create a fraud prevention authority.

Senate Majority Leader Shirkey, R-Clarklake, plans to go “right down the middle of the issue” rather than side with any interest groups whose aggressive lobbying has thwarted reform efforts in past years, McCann said.

“Sen. Shirkey won’t be siding with any stakeholders,” she said. “He’s directed Sen. Nesbitt to dig into the issue and leave no stone unturned.”

Legislators have tried for years to reform the state's auto insurance laws, but efforts have repeatedly stalled amid intense lobbying from hospitals, the insurance industry and trial lawyers. 

“I want to be on the side of the people, on the side of the drivers,” Nesbitt said. “I think that’s a lot more important than having special interest groups in Lansing be on your side.”

Michigan’s highest-in-the-nation rates are “wrong” and “it’s driving business out of the state," driving residents out of the state and leading motorists to drive illegally without insurance," Nesbitt said.

“You drive down the costs, you’ll increase the amount of folks that actually take up auto insurance and you lower the additional cost for the other driving public,” he added. “That’s how insurance works.”

The new House committee, chaired by Rep. Jason Wentworth, will be responsible for crafting legislation that lowers auto insurance premiums, addressing "one of the most pressing issues facing the states." Committee members will be announced this week. 

The Clare Republican, who also serves as the House's speaker pro-tempore, said the effort to reform the state's auto insurance will take bipartisan support and require lawmakers to "set our differences aside." 

“For each day that passes without a devised, lasting solution, Michigan families continue to be trapped between converging walls of financial hardship," Wentworth said in a statement. 

Wentworth said there are no plans to introduce a House bill on no-fault auto insurance reform in the near future. Instead, he sees the committee's initial hearings as a chance for education on the issue, a deliberative process that will engage people from both sides of the aisle "to deliver rate relief to our citizens."

At this stage, auto insurance reform is not a question of "if," but "how and when," he said.

"Anybody that has an interest in a solution will have a seat at the table," Wentworth said. "I will not tolerate people that just want to come in and provide roadblock after roadblock.”

House Democratic leader Christine Greig of Farmington Hills said the bipartisan committee has the potential to "break past tradition and instead listen to drivers and community leaders" to ensure affordable insurance. 

The Senate will not launch a separate committee to handle no-fault auto insurance legislation, McCann said.  

Legislators have long sought to curb auto insurance costs, along with Quicken Loans Chairman Dan Gilbert and Detroit Mayor Mike Duggan. Gilbert has said he’ll take the issue to the ballot if lawmakers don’t act on the problem this year.

Oakland County Executive L. Brooks Patterson has long opposed changes to the lifetime medical coverage guaranteed under current law.

In 2012, Patterson was covered by worker's compensation when he suffered significant injuries in an auto accident, but the experience gave him insight into the cost of catastrophic injuries. He has continued to push back on efforts to change the lifetime medical coverage provisions.

In a last-minute lame duck push in December, lawmakers proposed legislation that would allow driver to choose their levels of medical coverage, instead of keeping a current requirement for mandatory lifetime benefits. But the effort failed as legislators ran short on time. 


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