LANSING — Four House Democrats are introducing a package of legislation that would extend consumer protections to people who buy insurance and reduce the high cost of premiums. The legislation would address home and auto insurance and affect everything from the way students learn about insurance to the ways people shop for policies and the manner in which insurance companies handle their customers’ personal information.

“Nearly every person will have to buy an auto or home insurance policy at some point in their lives, but many people struggle to understand the complexity of insurance coverage and premiums,” said Rep. Jeremy Moss (D-Southfield), who sponsors two of the five bills in the package. “This legislation would arm consumers with the tools they need to become knowledgeable shoppers who can make wise decisions about their insurance.”

The bills in the legislative package would:

  • Ban the practice of price optimization, which some companies use to set insurance premium pricing on factors unrelated to what is being insured, such as making people who don’t shop around for insurance pay a higher premium. — Rep. Moss
  • Direct the Michigan Department of Education to create a voluntary model program that schools could use to teach students about how insurance works and their rights and responsibilities when it comes to having insurance. — Rep. Moss
  • Require the Michigan Department of Insurance and Financial Services to publish online premium comparisons for standardized coverage based on specific examples, which would allow shoppers to have an apples-to-apples comparison of premiums from several insurance companies — Rep. Brian Banks (D-Detroit)
  • Require insurance companies to get a consumer’s consent in writing before sharing personal information with third-party affiliates. — Rep. Sherry Gay-Dagnogo (D-Detroit)
  • Require insurance companies to include information on their annual report to the state Department of Insurance and Financial Services about any security breach that compromised consumers’ personal information, and the steps the company took to address the situation. — Rep. Tom Cochran (D-Mason)

“For people who own a home or drive a car, having insurance isn’t an option. Insurance companies understand that, and it puts consumers at a disadvantage,” Rep. Banks said. “Michigan needs to step up and do more to protect consumers in our state when it comes to understanding and buying insurance. When consumers have the tools they need to compare companies against each other, the balance between insurance companies and consumers is more balanced.”

Since insurance companies handle a great deal of personal information, including health conditions, home security and interactions with law enforcement, consumers need protections to keep insurance companies from sharing this information with other companies and from data breeches.

“Few companies have access to the depth of personal information of a customer as an insurance company does, so there needs to be extra protections in place for insurance consumers,” Rep. Gay-Dagnogo said. “A consumer should get to decide who can use their personal information and who cannot. That information shouldn’t be a profit center for an insurer without the express consent of the consumer.”

The representatives are hopeful that these proposals will soon get a hearing in committee and advance to the House floor.

“Wanting to protect personal information and wanting to be able to make informed choices about insurance are nonpartisan issues. They affect all of us,” Rep. Cochran said. “I’m optimistic that our colleagues across the aisle will join us in better protecting home and auto insurance customers in Michigan.”