Democrats are Finally Taking Steps to Pulverize Michigan Auto Insurance Rates

Michigan drivers, today would be a great day to check out the headlines on Freep.com. Want to guess why? Because for years Michigan drivers have been paying some of the highest auto insurance rates in the country, even though auto theft and accident rates have plummeted. Now the government is finally stepping in to crack the whip over unfair pricing practices and bring insurance rates back down into the realm of the low income driver.

Is there anyone out there that hasn’t felt the sting of the economy plummeting? For many it just means tightening our belts and cutting back on the amount of time we spend out on the town, but for low income families it can mean going without to be able to afford life’s little necessities (since most of us have a genuine desire to eat on a fairly regular basis!). When you weigh it up against things like food, shelter and potable water, the Michigan auto insurance is usually the first to go!

Picture: HouseDems.com

House Democrats have finally said what drivers have been thinking for years-that auto insurance companies are like blood sucking fiends preying on the weak. All right, maybe they didn’t use those exact words, but they were thinking it! They’ve stepped up and announced that they believe auto insurance companies are setting prices too high so they can make more profits, putting even basic coverage out of the reach of low income drivers. There’s currently a motion in place that will require Michigan auto insurance companies to offer low income auto insurance to drivers with good driving records.

Along with giving insurance companies a wake up call regarding the need for a low income insurance plan in Michigan (much like the one currently offered in California) the ten bill Democratic package also plans to prohibit insurance companies from using education, occupation and personal credit ratings to determine a driver’s auto insurance rates. While this new bill will eliminate some currently existing auto insurance discounts, most drivers (especially those in “high risk” occupations or with poor credit) will watch their Michigan insurance rates go down.

“Families across Detroit have suffered the worst in this economic recession, yet the insurance companies have taken every opportunity to charge Detroit residents the highest rates in the state,” said Rep. Bert Johnson, D-Detroit. “When people are doing everything they can to stay in their homes and keep the heat on, it’s appalling that insurance companies are using things like credit history to justify huge rate increases.”

When it’s all said and done Michigan auto insurance companies will also be forbidden from raising auto insurance rates for drivers who aren’t at fault in an accident, let the state insurance commissioner to deny rate hikes and order refunds for drivers who are paying too much. Since, statistically speaking, over 20% of drivers are paying too much for their coverage insurers aren’t very happy about it! The Michigan Insurance Coalition and the Insurance Institute of Michigan are trying to counter the plan, so stay tuned. It’ll be interesting to see how this works out!

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