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Friday, May 24, 2019

Gov. Whitmer, Republicans reach 'historic' deal to reduce auto insurance rates

Posted By on Fri, May 24, 2019 at 9:59 AM

click to enlarge STEVE NEAVLING
  • Steve Neavling

Gov. Gretchen Whitmer and Republican lawmakers have reached a landmark agreement to lower Michigan’s sky-high auto insurance premiums, potentially ending years of inaction and infighting.

The reform bill could be approved as early as Friday.

“After constructive conversations over the past week, I am pleased to announce that we have reached an agreement in concept on bipartisan auto no-fault reform legislation that will lower costs and protect coverage for Michigan drivers,” Whitmer said in a news release. “The deal: guarantees rate relief for every Michigan driver; provides a choice in coverage levels; establishes more uniform and structured compensation levels for medical providers; and removes the ability of insurance companies to discriminate based on non-driving factors. I look forward to working with the legislature to pass and sign this important legislation into law.” 

The tentative deal followed veto threats by Whitmer because the earlier Republican-led bills did not guarantee lower rates and failed to eliminate non-driving issues that affect premiums.

Under the new plan, non-driving factors that can't be included in determining rates are zip code, credit score, gender, marital status, occupation, education and homeownership. That's a good news for Detroiters, who pay more than twice the average annual premiums because of those non-driving factors.

The agreement aims to lower rates by ending the state’s requirement that auto insurance providers guarantee unlimited lifetime medical benefits. Michigan is one of the only state’s that has such a requirement. Under the deal, drivers will be permitted to purchase plans without unlimited medical benefits.

The agreement is “historic” and “a significant victory for hardworking people of Michigan,” Senate Majority Leader Mike Shirkey, R-Clarklake, and House Speaker Lee Chatfield, R-Levering, said in a joint statement.

“The people we serve are demanding action,” they said. “For far too long, drivers from Macomb to Menominee and from Kalamazoo to the Keweenaw have been absolutely fed up with paying the nation’s highest car insurance rates. They have been waiting decades for state government leaders to step up and deliver results. Today, that wait is over.”

Mayor Mike Duggan, who has lobbied for auto insurance reform, applauded the agreement.

"The bipartisan auto insurance agreement announced today is outstanding,” Duggan said. “It will cut rates for Michigan drivers significantly, and we congratulate Governor Whitmer and the Republican and Democratic leadership for coming up with an excellent bipartisan deal."

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