Wednesday, May 8, 2019

Gov. Whitmer pledges to veto bill aimed at lowering auto insurance

Posted By on Wed, May 8, 2019 at 12:29 PM

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Gov. Gretchen Whitmer is pledging to veto a Senate bill aimed at lowering Michigan’s sky-high auto insurance rates.

Whitmer said the bill, which passed 24-14, “creates more problems than it solves,” partly because it does not prevent insurance companies from using non-driving factors such as credit scores, age, and education as a factor in determining premiums. The bill also doesn’t guarantee that insurance rates will decline.

“It preserves a corrupt system where insurance companies are allowed to unfairly discriminate in setting rates and the only cuts it guarantees are to drivers’ coverage,” Whitmer said in a statement. "I am only interested in signing a reform bill that is reasonable, fair and protects consumers and this is not it. If this bill comes to my desk, I will veto it.”

Democratic Sens. Adam Hollier and Sylvia Santana joined Republicans to pass the bill, which now goes to the House of Representatives. The remaining Democrats opposed the bill for the same reasons Whitmer did.

The bill aims to eliminate the requirement that drivers have unlimited medical corsage in the event of a catastrophic injury. That requirement is one of the reasons Michigan has the highest auto insurance rates in the country.

The bill also would bar insurance companies from using gender or zip codes a rating factor for premiums. That could be good news for Detroiters, who have the nation’s highest average annual premiums at $5,414 a year, compared to $1,427 nationally.

Earlier this month, Whitmer ordered a study to determine how non-driving issues affect auto insurance premiums. The state allows insurance companies to use credit scores, education, zip codes, occupation, and homeownership as ratings factors for premiums.

Critics say those factors, which have nothing to do with a person’s ability to drive safely, discriminate against lower-income people who can least afford auto insurance.

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