Detroit Auto Insurance Bill Passes Committee

On Wednesday, the Senate Insurance Committee passed legislation allowing the city of Detroit to contract with insurers in order to provide cheaper automobile insurance to the citizens of the city. The bill would put a limit of $250,000 on medical benefits for critical care.

Detroit Mayor Mike Duggan, who made this policy a large part of his campaign, stated that the current estimated number of Detroiters driving without auto insurance is currently nearly 60 percent and could see a 10 percent increase of insured drivers under the proposed legislation. Mr. Duggan stated that auto insurance rates could decrease by $1,000 under Senate Bill 288.

The bill was reported with bipartisan support, passing 5 votes to 3, with Senator Bert Johnson (D-Highland Park) joining four of his Republican colleagues in support. Senator Wayne Schmidt (R-Traverse City) was the lone Republican who voted against the bill, joining the two remaining Democrats. An amendment offered by Senator Johnson lowered the percentage of drivers in a municipality driving without insurance needed to qualify from 50 percent down to 35 percent, opening up the program to multiple new municipalities. Senator Ken Horn (R-Frankenmuth) offered an amendment to include his home town, which was easily adopted, requiring those who sign up for the lower-cost policy to sign a waiver of understanding regarding their policies lack of standard no-fault insurance benefits.

Those who oppose the bill, such as ABATE of Michigan, argue that the $250,000 limit on medical expenses is too low as many severe accidents rack up bills well over this limit, putting the burden on the victims medical insurance. Mr. Johnson rebutted this argument saying that last year in Detroit only eight accidents incurred costs of over $250,000.

posted by PAA Online , Friday, June 5, 2015 10:54 AM
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