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Opinion: Time for Michigan auto insurance reform

Karen Whitsett
Beginning in July 2020, Michigan drivers will be able to choose their level of medical coverage on their car insurance policies, Whitsett reports.

That sound you heard across Detroit and throughout the state of Michigan last month was the collective sigh of relief from drivers paying the highest auto insurance premiums in the country. The Michigan Catastrophic Claims Association (MCCA) announced Nov. 13 it was reducing its per-vehicle fee charged to drivers to $100 — and even less for others. 

I voted for Senate Bill 1 earlier this year because I believe the reforms laid out in the bill will fix Michigan’s broken, outdated auto no-fault system and lower car insurance premiums for Detroiters struggling to make ends meet. 

The MCCA’s announcement shows those reforms are already working and will hopefully lead to more money going back into the wallets of the hardworking men and women in my district. 

Senate Bill 1, which was signed into law in May and took effect in June, includes a number of commonsense reforms that will lower costs and make car insurance more affordable for drivers throughout Michigan.

I worked hard to ensure my amendments from House Bill 4397 were accepted into Senate Bill 1 and eventually the law. Because of these efforts, Public Act 21 of 2019 blocks insurance companies from using non-driving factors to calculate rates and allowing for tolling of an auto insurance legal claim, so if people do need to file a lawsuit they have more time. 

For years, auto insurance companies in Michigan have been allowed to consider non-driving factors like your credit score, gender, educational attainment and ZIP code in determining your auto insurance rates, and it’s just not right. Beginning July 2020, your driving record will be the primary factor determining your insurance rates. Public Act 21 of 2019 restricts the tools of redlining and discriminatory rate setting by prohibiting insurance companies from using sex, marital status, ZIP codes, credit scores, homeownership, educational level attained and occupation as factors in setting rates.

The new law will also give you a choice in the level of medical coverage included with your car insurance. For decades, we have been forced to pay for unlimited, lifetime medical benefits. Michigan was the only state in the nation that had this expensive mandate, and it was one of the biggest reasons our car insurance was so expensive.

Beginning in July 2020, drivers will be able to choose their level of medical coverage on their car insurance policies. Those levels vary from the currently mandated unlimited, lifetime medical benefits to $50,000 for drivers who have Medicaid to a complete opt-out for people who have health insurance.

While it sounds simple, the ability for drivers to choose a level of medical coverage that works best for them and their families puts Michiganians in the driver’s seat to reduce their car insurance premium even more. 

Finally, the new law requires insurance companies reduce their rates for eight years. 

Detroiters will finally start seeing relief from the outrageous cost of auto insurance thanks to these reforms and the recently announced fee decrease by the MCCA. This relief is long overdue. 

State Rep. Karen Whitsett, D-Detroit, serves Michigan's 9th House District.