LOW COST INSURANCE FOR DETROITERS

The lack of affordable auto insurance in the city of Detroit is a problem that affects everyone.  Many believe that at least 50% of motorists in Detroit are driving without auto insurance, which is illegal, dangerous, and a detriment to encouraging people to move back into our city. 

Why are Detroit drivers in this unique situation?  Michigan is the only state that has complete coverage for catastrophic coverage, which is wonderful if anyone in our family ever has a closed head injury while driving.  In order to pay for such coverage, which can cost millions of dollars, we:

1) Require every motorist to buy unlimited personal injury protection (PIP) coverage, which is basically health care while we are in a car; and

2) Pay into the Michigan Catastrophic Claims Association (MCCA).  Once medical bills reach approximately $480,000, the MCCA pays the bills of care, rehabilitation, and home health care. 

Therefore, Michigan has some of the highest auto insurance rates in the nation and the most complete medical coverage in the nation.

Detroiters pay some of the highest rates in the state, and that is due to the fact that they pay more for collision and PIP coverage.  The insurance companies charge Detroiters more because they believe it costs more to ensure residents in large urban areas. 

How do we offer Detroiters more affordable insurance?  For years elected officials have offered solutions that would pit Detroiters against their suburban neighbors or insurers v. health care providers, but I introduced a bill that hopefully all sides can agree to.  My bill will:

·         Provide consumers the option to purchase PIP coverage (medical coverage) that will cover $50,000 and $100,000 of their health care bill.  This is called “PIP choice.”  Most auto accidents do not require more than $50,000 of health care bills and why should someone who has health care from work be required to buy more PIP coverage?

·         Provide “PIP choice” to residents in Detroit.

·         Offer it to residents who make 300% or less of the federal poverty level.

·         Offer it to motorists who have a good driving record.

·         Require the state to notify consumers of this low-cost policy and also mandate that the state provide yearly studies on its viability.

·         Try the bill as a five year test period.

·         Allow all insurance companies to sell the policy, but not mandate that they sell it. 

·         Provide this coverage for vehicles worth $20,000 or less.

I am really excited about this unique bill.  If motorists are paying less for PIP coverage and not paying for collision (collision insurance is not mandated in Michigan) they could save over 25% on their automobile insurance. 

Also, this bill will determine if insurance companies really are likely to sell a true, low-cost bill to Detroiters and whether this low-cost policy will be purchased by Detroiters. 

The bill is in the Senate Insurance Committee where I am a Vice Chair, and the committee will be holding a hearing on this bill soon. 

OTHER INSURANCE BILLS

ANTI-FRAUD BILLS

If we can reduce the level of fraud in the system, it should reduce the high cost of insurance in Detroit. 

• Senate Bill 296, which I sponsored, would expand the Auto Theft Prevention Authority (ATPA), which has been very successful in fighting auto theft, into a body that can also fight automotive-based medical fraud.
• Senate Bill 297, which I sponsored, would move the Assigned Claims Facility (ACF) from the Secretary of State’s office to the Michigan Automobile Placement Facility (MAPF).  The ACF was designed to be an affordable insurance program for those that are most difficult to insure, but the facility has been unable to perform and effectively provide affordable insurance.  Moving this facility will lead to more staffing and increased funding, which will hopefully drive down the costs of insurance for uninsured drivers. 
• Senate Bill 298, which I sponsored, would make it a crime to be involved in a fake auto accident, or to fake injuries from an auto accident.

 ANTI-MONOPOLY BILL

Another bill that I sponsored, Senate Bill 268, would prohibit insurance companies from owning or having an interest in auto repair facilities.  Customers should have the right to have their car repaired wherever they want, whether it be at a local shop, a friend’s business, or at the business that offers the best possible price.  Insurance companies should not be dictating where and by whom cars are repaired.

INSURANCE CHOICE BILLS

I cosponsored Senate Bill 293, which will give consumers throughout the state the option to purchase various levels of auto insurance.  If you want the most coverage possible, it will be available.  If you want limited coverage, such as only $50,000, it would be available.    Consumers have the right to purchase a Chevy, Buick, or Cadillac, why can't they have similar choices in insurance coverage?