LANSING, Mich. — State Sen. Kevin Daley on Tuesday supported the Senate plan to reduce Michigan’s highest-in-the-nation auto insurance rates.
“Auto no-fault was approved in 1972 under the promise that it would save drivers money and reduce lawsuits,” said Daley, R-Lum. “Today, our insurance rates are out of control and auto accident-related lawsuits are flooding our courts.”
Michigan drivers pay up to 83% higher than the national average and there are several reasons for this. The current no-fault system is riddled with lawsuits; there is a lack of transparency in medical treatment, causing overpayments for the care provided; and the cost of uninsured drivers is being passed onto law-abiding Michiganders. Additionally, drivers are not provided with any options for coverage. Instead, they are forced to pay for a premium benefit package whether they can afford it or not.
Senate Bill 1 aims to give drivers a choice to select coverage they can afford and that meets their needs. Specifically, it would eliminate the PIP requirement as it currently exists and allow drivers over the age of 62 the option of allowing Medicare or their other health care benefits to cover medical costs. It would also give younger drivers the ability to choose an amount of coverage that suits their needs and budget — providing savings that would correspond to the chosen benefit level.
The bill also seeks to provide greater transparency and equity in health provider billing practices. Because auto insurers are forced to pay significantly more to hospitals and other health care providers than do other insurers for the same treatments and services, we see a great deal of extra costs passed on to Michigan drivers.
“The current system is failing Michiganders in many ways,” Daley said. “We need to crack down on unnecessary medical treatments; reduce the system’s susceptibility to fraud; and reduce the number of uninsured drivers through more affordable rates. If nothing is done, the system will simply continue to spiral out of control.”
SB 1 was approved by the Senate with bipartisan support and will now move to the House of Representatives for further consideration.