Editorial: No more delays for auto insurance reform

We're tired of Michigan's highest-in-the-country auto insurance rates, and we're pretty sure we’re not alone. The factors that drive rates -- with Detroit's being the worst -- are well known, as past attempts at reform have brought to light. Lawmakers are again planning to tackle the problem, and it's past time they finish the job.

House Speaker Lee Chatfield, R-Levering, has made it clear that one of his primary goals is to tackle Michigan’s bloated car insurance premiums.

Chatfield recently selected Rep. Jason Wentworth, R-Clare, to lead a House special committee focused on a collaborative approach to form a piece of car insurance legislation to benefit Michigan drivers. A bipartisan plan will be necessary now that the state has divided government. 

The first bill introduced in the Michigan Senate this year is also focused on car insurance, showing that pressure is building in Lansing.

Michigan is one of 12 states that have no-fault auto insurance and currently has the nation's highest insurance premiums, which take a serious financial toll on drivers.

Though car insurance reform is necessary for all Michiganians, it is even more urgent for Detroit drivers. Detroiters pay an average of $6,197 annually for auto insurance coverage, more than twice as much as drivers pay elsewhere in the state and four times the national average.

In Detroit, an expansive city with poor public transit options, cars are a necessity.

But the city’s low average income means even if a household wanted to pay for car insurance, it could cost them nearly a quarter of their paychecks. Some estimates show that 60 percent of Detroiters drive without insurance.

And that only further drives up the cost for those who do pay for car insurance.

Wentworth says he likes the no-fault system generally -- it covers medical expenses, wage loss benefits, replacement services, and the damage you do to other people’s property without any consideration of who caused the accident.

“We have the Cadillac of all no-fault systems," Wentworth says. “The problem is not everyone can afford a Cadillac.”

Though Wentworth is hesitant to name any specific factors that have caused high premiums, others have cited rampant fraud and overcharging for medical care. Medical providers overcharge patients injured in a car accident as much as two to three times more for the same procedure as other kinds of insurance.

Another factor is under Michigan’s no-fault provision, those involved in serious car accidents can tap into the unlimited medical benefits fund: the Michigan Catastrophic Claims Association. The never-ending benefits attached to it separates Michigan from other states.

When Detroit Mayor Mike Duggan attempted to work with the Legislature in previous years to offer some relief for Detroit drivers, he pointed to this fund as one of the main culprits.

Lawmakers know what they need to do, and they must get it done this year.