Michigan Senate GOP Says Cutting Car Insurance Rates is a Top Priority

Senate Republicans on Tuesday signaled their intent to make lowering high auto insurance premiums a top priority in the two-year session, proposing legislation that would make it optional for Michigan drivers to buy what is now mandatory unlimited medical coverage.

The bill is the first to be introduced by GOP senators who control the chamber, an indication that it is important for the majority. The measure lacks many specifics, which Republicans said is meant to show they are open to examining every area of the no-fault law that is driving up rates.

“I think as we heard last year loud and clear from citizens throughout Michigan, we need to lower the cost of auto insurance. We need to make sure that we make rates more affordable for the driving public,” said the sponsor, Republican Sen. Aric Nesbitt of Lawton.

For years, efforts to curtail Michigan’s high auto insurance premiums have resulted in legislative stalemates, with some of the state’s biggest political spenders and lobbyists – hospitals, insurers, business groups, plaintiffs’ attorneys, health providers and insurance agents – lining up on various sides. In the last session, the GOP-led Senate passed a bill that would have made changes such as letting older drivers avoid paying most of a mandatory fee that covers unlimited medical benefits. The Republican-controlled House, meanwhile, defeated separate legislation – with Democrats and a number of GOP lawmakers voting no.

Michigan, the only state to require unlimited lifetime coverage for medical expenses resulting from auto crashes, allows health providers to bill car insurers much more for care than health insurers pay. A $192 annual per-vehicle fee also is assessed to reimburse car insurers for expenses surpassing $555,000 for the catastrophically injured.

The new legislation says in-state drivers pay car insurance rates that are on average 83 percent higher than the national average. It states Republicans’ intent to let motorists age 63 and older with Medicare or other lifetime health care benefits not pay personal injury protection fees. Younger drivers could choose a lower amount of personal injury protection coverage, and health providers could be restricted from billing auto insurers more for medical services.

Republican House Speaker Lee Chatfield has pledged to tackle auto insurance costs, too. On Monday, he appointed a chairman of a special committee tasked with addressing the issue.

Groups on opposite sides of the debate – the insurance industry and Michigan Brain Injury Provider Council – welcomed legislative leaders’ commitment to making changes to the car insurance system.