A bill designed to bring down Michigan’s astronomical auto insurance rates was defeated in the state legislature.
After hours of debate, the Republican-controlled House rejected the measure with a 45-63 vote.
“Everybody in the state of Michigan knows car insurance is too high and something has to be done about. But there’s something about once you enter the boundaries of [Lansing], that year after year nothing gets done,” said Detroit Mayor Mike Duggan, who’d lobbied in favor of the unsuccessful bill.
Auto insurance rates in Michigan have historically been among the highest in the country. Unlike other states, insurers in The Mitten are required to pay unlimited medical expenses for individuals injured in car accidents.
The industry has been notoriously evasive about the practice, declining to release documents and financial breakdowns of plan payments and their relation to profit.
Legislators in favor of bringing down rates say they didn’t think the bill was likely to pass – but considered any effort at reform to be an important step in the right direction.
Among the bill’s sponsors was House Insurance Committee Chairwoman Lana Theis, who said the legislation “wasn’t perfect” but a “huge step in the right direction.”
If passed, it would have “reined in out-of-control costs, crack down on fraud in the system, give drivers a choice and save families hundreds, potentially thousands of dollars annually on their auto insurance while making it possible to sustain their unlimited option,” explained Theis.
House Speaker Tom Leonard accused Democrats of sabotaging the bill, noting that 41 of the 45 votes in favor of the move came from conservatives.
He said “disingenuous” Democrats were “siding with hospitals and trial attorneys over the people they represent.”
Leonard’s accusations were rebutted by House Minority Leader Sam Singh, who said liberals wouldn’t support a proposition that could cause more Michiganders to go into debt due to high healthcare costs.
The Insurance Journal notes that, even if the bill had passed through the House, its future in the Senate would have been incredibly uncertain – the chamber’s GOP head is a staunch opponent of government-mandated reductions for insurance premiums.
Unsurprisingly, Detroit’s mayor condemned the legislative debacle, saying lawmakers knew the effort would fail and were simply playing politics.
“I would put the blame on the people who are making tens of millions of dollars gouging Michigan consumers,” said Duggan. “And they got too many votes on both sides of the aisle, as they have, and we need to come back with a new strategy and a new approach.”
Insurance rates in Detroit are the highest of any large city in the United States, leading many in the problem-ridden city proper to drive uninsured.
Sources
Auto Insurance Reform Bill Defeated in Michigan House
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