Michigan legislator says bills would reduce auto insurance costs for residents

Michigan legislators have filed two bills aimed at lowering auto insurance for consumers in the state.

Premiums for new policies written or renewed after the effective date of  Senate Bill 328 would be reduced by 10%, as calculated from the rates filed and approved under the Michigan Insurance Code.

According to the bill, insurers wouldn’t be able to reduce coverage for policyholders because of the price reduction.

Senate Bill 329 would amend state law to remove reinstatement fees and rate increases for those in the state who seek insurance policies after a coverage lapse.

The bill would prohibit insurers from denying coverage, charging a reinstatement fee, or increasing premiums “solely because the person previously failed to maintain insurance required by section 3101 for a vehicle owned by the person.”

Both bills were introduced in May by Sen. Jeff Irwin (D-District 15) and have been referred to the Senate Committee on Finance, Insurance, and Consumer Protection.

“Car insurance rates in Michigan are too high. Insurance company profits are soaring, along with our costs as consumers,” stated Irwin in a May 29 press release. “It’s time for the legislature to stand up to these unjustifiably high car insurance rates. People shouldn’t be penalized for having a lapse in coverage because they are sick or otherwise unable to drive. For people coming back into the market for car insurance, we need to make it easier, not harder, for them to pay into the system.”

The release notes that people who “hit hard times due to illness or unemployment” often find it hard to keep their auto insurance coverage.

“When they try to do the right thing by getting covered again, they often find that they have to pay even more than they were before,” the release says. “Under Senate Bill 329, drivers would still be required to carry insurance; the bill would simply remove a major barrier to restoring coverage. Michigan’s high auto insurance costs lead to one in five Michigan motorists going uninsured, a higher rate than the national average of one in seven, according to the Insurance Research Council.”

According to the release, between 2020 and 2022, Michigan reduced its uninsured rate by 6% — more than any other state.

“A key factor to this success was a temporary ban on penalizing drivers when they seek to become insured again after a lapse in coverage. By permanently banning this practice and lowering extortionate premiums, this legislation would reduce the number of uninsured drivers in our state.”

Images

Featured image: Sen. Jeff Irwin (D-District 15). Provided by Irwin’s Office.