Theis supports compromise plan to lower auto insurance costs

LANSING, Mich. — Sen. Lana Theis on Friday applauded a bipartisan agreement on legislation that will lower auto insurance costs for drivers throughout Michigan.

The final reform was approved by the Senate and House, and the governor is expected to sign the bill soon.

“I am pleased the governor has joined lawmakers in supporting long-overdue reforms to lower auto insurance costs for drivers throughout our state,” said Theis, R-Brighton, who chairs the Senate Insurance and Banking Committee. “This is a plan that will provide savings as a result of giving drivers more choice in the insurance they purchase, by starting to crack down on fraud, through the reining in out-of-control health care costs related to auto accidents, and by ensuring a level playing field for all drivers.

“This plan will help ensure that, not only will drivers be better able to afford the auto insurance they have, but uninsured drivers will actually be able to afford to purchase auto insurance.”

Details of the plan include:

  • Requiring auto insurers to provide customers with five personal injury protection options that guarantee varying degrees of rate reduction at $50,000 for Medicaid eligible consumers; $250,000; $500,000; unlimited coverage, and an opt-out for drivers with qualified health plans, including Medicare;
  • Reducing the annual Michigan Catastrophic Claims Association fee by 80% for all above options other than unlimited;
  • Strengthening the insurance fraud division within the state Department of Insurance and Financial Services to empower enforcement agencies to crack down on auto insurance fraud;
  • Ending excessive health care costs related to auto insurance claims by implementing a fee schedule to cap the amount providers can charge insurers; and
  • Eliminating non-driving rating factors, such as the use of ZIP codes, sex, marital status, home ownership, or FICO credit scores to ensure a level playing field.

Michigan drivers pay the highest auto insurance rates in the country — 83% higher than the national average, according to an October 2018 report. A University of Michigan study also said that auto insurance rates are unaffordable in 97% of the state’s ZIP codes.

Senate Bill 1 awaits the governor’s signature.

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