LANSING – After multiple failed attempts to make changes to Michigan’s costly no-fault auto insurance system, the state Senate is taking another crack right before it breaks for its 10-week summer recess.
The biggest change would allow insurance companies to offer senior citizens two options for auto insurance coverage: $50,000 in coverage for health care costs and then their Medicare insurance would kick in — an option that would be cheaper — or the current unlimited lifetime benefits for people critically injured in car crashes offered through the Michigan Catastrophic Claims Association.
“I would like to be standing up here talking about auto insurance reform for everyone. Unfortunately the House (of Representatives) hasn’t been able to find the votes, so let’s start with the seniors,” said Sen. Rick Jones, R-Grand Ledge. “Many of the seniors in my hometown drive to their church, doctor and grocery store. They should be able to get lower rates. We’re pricing them out of auto insurance.”
But Democrats said the bills, which passed on votes of 23-13, didn’t go far enough and failed to offer a comprehensive approach to lowering Michigan’s highest-in-the-nation costs for auto insurance. Four Republicans — Sens. Mike Kowall of White Lake, Mike Green of Mayville, Tory Rocca of Sterling Heights and Dale Zorn of Ida — joined all the Democrats in opposing the bills.
“Instead of taking the easy way out by doing something just to get something done, why not get our hands dirty and finally get some work done?” said Sen. Morris Hood, D-Detroit. “The smoke and mirrors just don’t work for me.”
They offered amendments that would require guaranteed savings of at least 10% in auto insurance rates and tie the bills to ones they’ve introduced that would prohibit auto insurance companies from using non-driving related factors, such as credit scores and ZIP codes, to determine rates. Those amendments failed.
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Instead, the only guaranteed savings would be for seniors who choose the $50,000 coverage option because they wouldn’t have to pay an annual $160 fee to the MCCA.
Other bills passed in the Senate call for limiting attendant care costs for people caring for critically injured people to 56 hours a week, at a rate negotiated between the provider and the recipient, and then $15 per hour for anything over 56 hours, and limiting the benefits offered to people who are injured in car crashes, such as pedestrians and bicyclists who aren’t covered by auto insurance, to $400,000 a year.
The bills also create a fraud authority in the Attorney General’s Office to investigate complaints of fraud by either insurance companies or the people who are insured.
Not touched in the bills passed by the Senate are the unlimited lifetime benefits offered through MCCA for anyone other than senior citizens. Efforts to reform auto no-fault insurance have fallen through when lawmakers have tried to limit those benefits, so the Senate decided to nibble around the edges of the issue.
“It’s a step forward that our citizens desperately need,” said Sen. Joe Hune, R-Gregory, adding it’s extremely difficult to accomplish comprehensive reform. “There is so much money to be made in this system … when you’re talking about hundreds of interest groups and dozens and dozens of lobbyists, it seems like they stymie any bit of significant progress we can make because it’s easy, when you have a large piece of legislation, to find a way to vote no.”
The last time the Legislature tried to pass auto insurance reform in November, the House of Representatives failed to get the votes necessary to pass a plan pushed by Detroit Mayor Mike Duggan that would have offered guaranteed rate reductions for lower levels of coverage without lifetime benefits.
The bills — SB 787 and 1014 — now move to the House of Representatives for consideration. But both chambers are expected to adjourn next week for the summer and the bills probably won’t get a hearing until the fall.
Contact Kathleen Gray: 313-223-4430, firstname.lastname@example.org or on Twitter @michpoligal.
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