Michigan’s Watters Has Faith in Plan for Good Urban Risks

Michigan Insurance Director of Insurance Linda Watters wants drivers in urban areas to get a fair shake on insurance by getting them group rates through their faith-based and community organizations.

Working with urban religious and community groups, her department has developed the Michigan Purchasing Group Initiative under which the groups would receive bids from insurance companies for insuring its membership. Individual members would then be rated as part of a group for auto and homeowners insurance coverage.

Watters envisions a pool of up to 200,000 good drivers and responsible homeowners who are members of these organizations.

The plan is being piloted in two cities, Flint and Detroit.

Four insurance companies have asked state officials for details on bidding. The companies are among more than 65 the state contacted about insuring residents in the two cities.

“With Michigan’s laws, we know that insurers are permitted to rate by territory, but we also know that we have citizens in those territories that have great driving records, have never filed claims, who impeccably maintain their homes, but for where they live, they’re paying a higher rate,” said Watters. “We have identified an opportunity for them to develop purchasing groups through the religious communities in these cities and grassroots community groups that are developing mechanisms for individuals to, in effect, have insurers bid on their business. We are hoping it will reduce rates for the citizens.”

Watters offers her perspective on this initiative on auto and homeowners rates in an Insurance Journal video interview, one in a series of 15 interviews with state regulators titled, “The Commissioners.” All 15 interviews are now available for viewing in the video feature section on Insurance Journal’s Web site at www.insurancejournal.com.

“We think it is a win-win for the insurers to identify a population of individuals who have low risk, but also provide the consumers in the state some relief because we see the disparities across the state,” Watters added.

Watters wouldn’t name the four insurance companies. The pool of good drivers and people who keep up their homes is still being built.

Several thousand people have filled out surveys to see whether they qualify, said Greg Roberts, director of the state’s Office of Community and Faith-Based Initiatives. Once the program is operating, the pool will expand to other cities, he said.

To view the entire interview with Watters:
Watch Watters Interview“>Watters Interview