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State House Holds First Hearing on Duggan, Leonard Auto No Fault Overhaul

WDET//Michigan House GOP

Detroit Mayor Mike Duggan (left) and State House Speaker Tom Leonard (right)

The state legislature held a marathon committee hearing on a bill to overhaul Michigan’s auto insurance law Tuesday. The committee heard ideas for potential changes to the bill.

One idea is to prevent insurance companies from using credit scores to influence rates.

Detroit Mayor Mike Duggan had a major hand in crafting the bill the committee discussed. He said he’d like to see changes to the bill; but he said the focus needs to be on passing immediate rate relief.

If we can get it done with credit scores I’m in favor,” Duggan said. “If we get it done without credit scores it’s still a significant relief.”

HB 5013 would let drivers cap their health coverage. Right now all drivers are required to have unlimited lifetime benefits for catastrophic injuries from car accidents. Opponents to the unlimited coverage requirement say it’s why Michigan’s rates are among the highest in the nation.

But a study from the nonpartisan House Fiscal Agency says getting rid of the lifetime benefit requirement could cost Medicaid $10 million in the first year. That number could go up to $150 million a year within ten years. That’s because the government would have to make up for the people who no longer get unlimited lifetime benefits.

Bill sponsor Rep. Lana Theis (R-Brighton), a bill sponsor, said it’s not a direct cost shift.

Right now every single citizen in Michigan is paying for unlimited lifetime medical benefits that they’re very likely not to need and that they probably already have another insurance to cover,” she said.

But not everyone agrees. Some argue there are ways to lower rates without offering lesser coverage.

If we’re gonna talk about rates, why don’t we talk about some basic principles of fairness?” said Tom Sinas of the Coalition Protecting Auto No-Fault. “Why do we let people who live in Dearborn be charged twice as much as people who live in Ann Arbor just because of where they live.”

Image credit: Jake Neher/WDET

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About the Author

Cheyna Roth

Reporter

Cheyna has interned with Michigan Radio and freelanced for WKAR public radio in Lansing. She’s also done some online freelancing and worked on documentary films.

CRoth@MPRN.org   Follow @Cheyna_R

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