House speaker: Cut high auto insurance rates
Lansing — The long-promised but dormant issue of auto insurance reform appears to be reviving among some leading Republican state lawmakers.
House Speaker Tom Leonard, R-Dewitt, said late last week that high auto insurance rates are “one of the biggest issues facing our state” and pledged to cut premiums as much as possible.
But Leonard did not commit to a time line for attempting to rein in the nation’s highest average auto insurance rates. The speaker is letting a House panel that deals with insurance issues decide how to craft a reform package after years of lawmakers talking about slashing high premiums.
“There will be no politics played with auto no-fault reform,” Leonard said. “ … I’d like to see us go as low as we can. You know, the bottom line is this: We’ve got the highest auto insurance rates in the country.”
Gov. Rick Snyder, a Republican, has lobbied for an overhaul of the state’s no-fault auto insurance law, including its nation-leading uncapped coverage for medical expenses. But scaling back guaranteed protections for catastrophically injured crash survivors has proven politically challenging.
A reform package the Senate passed in 2015 included a bill that kept Michigan’s unlimited injury coverage but set limits on rates hospitals would be paid for treating auto insurance-covered patients. The package never received a House floor vote after the Michigan Health and Hospital Association aired television ads that featured a woman who was severely injured in an auto crash and benefited from the state’s unique no-fault setup.
Still, Leonard said he and other lawmakers are trying again by working to build a coalition and hash out ideas with Detroit Mayor Mike Duggan about how how to curb high costs for Detroiters and other Michigan residents.
Detroit has among one of the highest auto insurance rates in the nation. That’s one of the biggest issues holding back the city’s economic growth, Duggan said Wednesday, when he lobbied lawmakers in Lansing to do something about it.
“To me, the biggest scandal in the state is auto insurance,” Duggan told a panel of House lawmakers.
The state’s insurance laws have been “perverted in a way that no one could imagine,” and it’s spurring Detroiters to say they live in the suburbs outside of Detroit or drive to work illegally to avoid crippling costs, the Democrat mayor said.
Duggan has promoted his “D-Insurance” plan to drive down premiums, but he couldn’t persuade some lawmakers in the Detroit legislative caucus to agree with all aspects of the plan.
The mayor is pushing it again in the Republican-controlled Legislature. Duggan’s D-Insurance plan could save residents up to $2,300 a year, according to the city.
Leonard and Duggan attribute Detroit’s high rates to out-of-control health care costs tied to automotive insurance plans.
Hospital costs for those who were in car accidents can be three or four times higher than the same medical procedures covered by commercial health insurance companies for injuries not suffered in an automotive accident, Leonard said.
mgerstein@detroitnews.com
(517) 371-3661
Twitter: @MikeGerstein