Politics get in the way of auto insurance reform in Michigan

Hopes of reducing the costs of Michigan’s sky-high auto insurance have come to a political standstill.

At 2:10 a.m. Thursday, the Republican-led state House approved a broad bill that would cut insurance rates by eliminating the requirement that drivers have unlimited medical coverage in the event of a catastrophic injury. Earlier in the week, the Senate passed a version of the insurance reform bill.

But Gov. Gretchen Whitmer pledged to veto the plan because she said it’s neither “reasonable” nor “fair.”

"The governor has made it very clear that she is only interested in signing a reform bill that is reasonable, fair, and provides strong consumer protections and immediate financial relief,” Whitmer spokeswoman Tiffany Brown said. “In their current form, neither bill passed by the legislature meets that standard. The governor has also been very clear that passing a budget that fixes the damn roads is her first priority."

Democrats, including Whitmer, said they oppose the bill because it allows insurance companies to continue charging more for non-driving factors such as credit scores, gender, education, and ZIP codes. Those factors are why Detroiters have the highest auto insurance rates in the country – an annual average premium of $5,414 a year – compared to $1,427 nationally. That has made it difficult for many people to afford insurance in a city with the highest poverty rate in the country.

Mayor Duggan, who has led the auto reform effort on the municipal level, plans to meet with senators to address non-driving factors that are "discriminatory."

"The House bill that passed last night is encouraging," Duggan's chief of staff Alexis Wiley said. "It should save the average Detroit driver $1,000 to $1,500 a year. The mayor still would like to see the discriminatory effects of non-driving factors like credit scores eliminated and will be working with the Senate to try to get those issues addressed equitably. The mayor deeply appreciates the hard work of legislators on both sides of the aisle over the last couple of weeks to finally solve this important issue."

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