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When it comes to the cost of car insurance, Michigan is No. 1 for all the wrong reasons. Drivers in our state pay the highest auto insurance premiums in the country — and have for more than five years.

This has to change.

According to The Zebra’s latest State of Auto Insurance report, Michigan drivers pay, on average, $2,693 a year for car insurance. The national average is $1,470.

Worse yet, our neighbors to the south and west pay even less than that. Ohio drivers pay, on average, $1,032, which is the sixth lowest in the nation, followed by Wisconsin drivers at $1,070. Indiana drivers pay $1,150 a year.

To keep Michigan moving forward, policymakers must work to reform its auto insurance system and make a dent in the premiums drivers pay.

Michigan’s broken, outdated auto no-fault system is shameful. It must be reformed to lower the cost for drivers across the state. To best lower the cost, the Legislature must do the following:

  • Stop medical providers from dramatically overcharging for the same medical procedure compared to other forms of insurance, like workers’ comp, Medicare and health insurance.
  • Give consumers a choice in the level of medical coverage they carry with their auto insurance policy, just like every other state does, so they can choose a plan that works best for them and their families.
  • Crack down on fraud and abuse by ambulance-chasing lawyers and individuals looking to game the system, which cost the average family hundreds of dollars a year in additional premiums.

In the 1980s, Michigan’s workers’ compensation premiums were the highest in the Midwest, fifth highest in the nation and 35 percent higher than the national average. The system was fraught with waste, fraud and abuse, frivolous lawsuits and price-gouging by medical providers.

Sound familiar?

Similar to this debate, the premiums got so outrageous that the Legislature was forced to intervene and took action to control overcharging by medical providers by instituting a workers’ compensation fee schedule.

Fast-forward 40 years and you can see the results: Michigan now is considered a model system for workers’ compensation insurance and has some of the lowest premiums in the nation.

We are encouraged by legislative leaders who are taking this issue seriously and making auto no-fault reform a top priority. The Michigan Chamber is urging lawmakers to be bold on this issue and to stay focused on the 7.1 million licensed drivers who need them to reform the current system to make their auto insurance premiums more affordable and competitive.

Nibbling around the edges isn’t going to cut it. No, drivers need real reforms that will significantly lower the cost of auto insurance.

It’s time for lawmakers to deliver real relief to drivers and businesses across the state and make Michigan No. 1 for all the right reasons.

Rich Studley is president and CEO of the Michigan Chamber of Commerce.

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