More discussion in Michigan’s legislature to reduce our auto insurance rates between 20-30%.

Will it actually happen, who knows?

There appears to be a bipartisan coalition of 15 Michigan state representatives that have been working on and finally announced their auto insurance reduction plan.

Mlive is reporting that the plan looks to:

  • Limit factors auto insurers can use to set rates, so that auto insurers aren't using things like zip codes or gender to charge some drivers more.

Note:  I do not see how limiting what the auto insurance companies’ actuaries use to determine rates would lower rates for all.  I would think that they would have to raise rates on some to cover the lower rates on others.  If zip codes and gender data indicates something to these companies in which they are attempting to determine cost, which would then drive insurance premiums, by taking that away the companies would have to be risk adverse and increase other people’s premiums.

  • Requiring auto insurance and health insurance to coordinate.
  • Creating a fraud authority to root out fraudulent activity that injects more costs into the system.

Note:  Why would they not have fraud investigators already?  Do you mean I have been paying higher rates because there was no robust “fraud authority”, thanks.

  • Subjecting the Michigan Catastrophic Claims Association, which kicks in when an auto crash victim incurs more than $555,000 in medical expenses, to the Freedom of Information Act.

Note: Need to know more about how subjecting MCCA to FOIA would potentially bring down my rates.

Now something is in these proposed package of bills that I do believe could bring down our auto insurance rates.  The legislation would set a medical fee schedule, this medical fee schedule would tie the reimbursement rates for auto crash victims to 185% of the reimbursement rate for workers compensation payment.  Currently medical establishments at times charge 300 to 400% more than workers compensation claims for the same procedures.

By the way the legislatures say the fee cap would not apply at Level 1 trauma centers.

The bipartisan group of Michigan State Representatives at a press conference announcing the package on yesterday included 15 House members. They included Rep. Ed Canfield, R-Sebewaing, Rep. Ben Frederick, R-Owosso, Rep. Tim Greimel, D-Auburn Hills, Reps. Steve Marino, R-Mt. Clemens; Robert Wittenberg, D-Oak Park; Rep. Joe Graves, R-Argentine Twp.; Peter Lucido, R-Shelby Twp.; Sherry Gay-Dagnogo, D-Detroit; Jeff Yaroch, R-Richmond; Patrick Green, D-Warren; Abdullah Hammoud, D-Dearborn; Donna Lasinski, D-Scio Twp.; Jon Bizon, R-Battle Creek; and Daire Rendon, R-Lake City and Mike Webber, R-Rochester Hills were there in support.

Pete Kuhnmuench, Insurance Institute of Michigan executive director was quoted in the article stating:

We're still reviewing the proposal, but doesn't appear to offer any cost savings to drivers struggling with the nation's highest auto insurance premiums.  We believe a proposal that will bring real relief to drivers must contain: A fraud authority to investigate the rampant abuse and scams within the no-fault system, a fee schedule to reduce the cost of medical care and end the practice of medical providers charging auto insurers three to four times more for the same procedure than other insurers and giving drivers a choice in their level of medical care so they can choose coverage that works best for them and their family.

We are being informed that the package of bills with the above group's proposed changes will be introduced to the Michigan House in the next couple of weeks.

Due to the fact that there is bipartisan support of these bills might it have a chance to actual pass the house, maybe, this is politics.  The bigger and more important question to all of us is will these bills actually work if passed in to law and save us all money.

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