LANSING, Mich., Aug. 25, 2021 — In light of a devastating new report showing that Michigan policyholders were overcharged $1.12 billion by auto insurance companies in 2020, House and Senate Democrats today renewed calls to hold the auto insurance industry accountable and pass laws to protect accident victims.
The report comes as the auto insurance industry refuses to negotiate with health care providers over services for catastrophically injured victims, putting their care in jeopardy. A new law that went into effect in July slashed the reimbursement rate for specialized rehabilitation care by 45 percent, leaving survivors with severely limited options for the specialized care they need—and sometimes no options at all.
“As we drove fewer miles, crashed much less, and filed thousands of fewer claims during the pandemic, insurance companies continued to charge high premiums over $1 billion in excess – yet at the same time, accident victims are being denied the care they need,” said House Democratic Leader Donna Lasinski (D-Scio Township). “Clearly, auto insurance companies are taking advantage of loopholes in our auto insurance laws. We need to pass legislation to protect accident victims and all Michigan drivers.”
The report, conducted by the Consumer Federation of America and the Center for Economic Justice, found that nationwide “auto insurers reaped windfall profits of at least $29 billion in 2020 as miles driven, vehicle crashes and auto insurance claims dropped because of the pandemic and related government actions.”
A practicing physical therapist for more than 20 years and sponsor of House Bill 5125, state Rep. Julie M. Rogers (D-Kalamazoo) has treated many auto accident survivors.
“While it has been a privilege to help rehab these individuals, many have severe, complex, and often lifelong complications that take more than a couple of weeks in physical therapy,” she said. “Their lives have been changed forever. Despite faithfully paying their premium year after year, insurance companies in Michigan are walking away from their end of the agreement and raking in historic profits instead. It’s unconscionable that they are refusing to invest in the care of their policyholders injured in auto crashes against the backdrop of record-shattering profits across the country.”
State Sen. Curtis Hertel Jr. (D-East Lansing) earlier this year introduced SB 314, which would have offered a permanent solution to Michigan’s catastrophic care crisis. The bill has yet to receive a hearing.
“The auto insurance industry is raking in record profits while cutting the specialized, lifesaving care of auto accident survivors and putting them at further risk,” Hertel said. “Anyone can see how wrong that is. I remain committed to ensuring survivors have continued access to the care they’re entitled to, and I will continue fighting until we have a solution.”