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Michigan Insurance Panel Oks Auto No-Fault Overhaul With Rate Rollback

Car Crash
Flickr/ ODOT
DOT crews worked with other first responders to clear up this weather related crash

A state House committee has approved some big changes to Michigan’s auto no-fault insurance law. It would set new limits on what hospitals could charge insurance companies. It would also guarantee, for two years, at least, motorists will save money on their coverage.

“There is a mandatory rate rollback of $100 per vehicle that has been put in this bill,” says state Representative Tom Leonard (R-DeWitt Township), who chairs the House Insurance Committee. He says it’s a good compromise.

“I want to make certain we have rate relief for our citizens, but I also want to make certain that all the numbers are actuarially sound. The last thing we want to do is force any company to leave the state because we’ve put an undue burden on them.”

But Leonard acknowledges $100 a year won’t make insurance affordable in Detroit as well as other urban centers. That’s a main goal of the no-fault overhaul. Michigan and its cities have some of the highest auto insurance rates in the country.

State Representative Brian Banks (D-Detroit) is also on the insurance committee. He says the savings are paltry compared to the lost revenue to hospitals and benefits to patients.

“With an issue that’s this broad, and it can affect millions, there’s some serious concerns, and we’ve moved it too fast, and I don’t believe the voice of the people have been heard.”  

There’s no word on when a vote on the legislation by the full House might take place.