LANSING — House Democrats introduced a plan today to dramatically lower auto insurance rates while maintaining catastrophic care coverage for accident victims. The proposal, introduced as the H-2 substitute to House Bill 4397, comes on the heels of a proposal rushed through the Michigan House which would create a tiered auto insurance benefit system without addressing non-driving factors or regulating insurance rate-setting practices. Unlike the House Democrats’ proposal, House Bill 4397, would not require insurance companies to guarantee lower rates for drivers. Michigan’s auto insurance industry is one of the least regulated in the U.S. with Michigan drivers paying nearly two times more than drivers anywhere else in the nation, according to a University of Michigan study.
“Too many Michiganders cannot afford to pay for auto insurance and they deserve a plan that guarantees lower rates now,” said House Democratic Leader Christine Greig (Farmington Hills). “Our solution would have provided long-term, meaningful rate reduction for drivers while holding insurance companies accountable for discriminatory practices. But instead of working across the aisle to get the best deal for drivers, House Republicans rushed through a bill in the dark of night that only lowers costs for five years before insurance companies can once again jack up drivers’ rates. That is wrong and Michiganders deserved better than another insurance industry handout.”
The Democratic proposal would have:
- Guaranteed Lower Costs – a 25% rate reduction off the total auto insurance bill for five years, with any future increases tied to inflation
- Protected Catastrophic Care Coverage – maintained high-quality benefits from current system
- Reduced Medical Costs – ensure fair, negotiated rates between insurance companies and health care providers
- Reduced Lawsuits – a 3-year look-back rule for claims
Though the Republican proposal did not receive a public hearing or testimony, the bill passed by a slim margin of 61-49. House Democrats plan to continue pushing for additional reforms that reduce rates for more than five years.
A copy of the Democrats' proposal can be found here.