LANSING, Mich. — State Sen. Rick Outman on Tuesday supported the Senate plan to reduce Michigan’s out-of-control auto insurance rates.
“The Legislature has been wrestling with reforming no-fault for decades,” said Outman, R-Six Lakes. “Motorists have fantastic benefits under the system, but to many, the costs are simply not affordable and often outweigh the benefits. It was recently announced that auto insurance is unaffordable in 97% of the ZIP codes in Michigan. We cannot have a system that almost no one in the state can afford.”
There are several items that contribute to the rates drivers in Michigan pay. For example, all Michigan motorists are required to purchase unlimited personal injury protection (PIP) insurance which pays for uncapped medical expenses resulting from injuries sustained in an auto accident. Medical care through no-fault claims is also significantly higher than through traditional health insurance or Medicare. That’s because there is no fee schedule that health care providers must follow like there is with private insurance, allowing providers to charge exorbitant rates for care received.
Senate Bill 1 would give drivers flexibility when choosing their coverage. The bill would eliminate the PIP requirement and allow drivers to choose coverage that meets their needs. Drivers over the age of 62 would have the option of allowing Medicare or their other health care benefits to cover medical costs, and younger drivers would be able to choose coverage that suits their needs and budgets.
The legislation also aims to provide greater transparency and equity in health provider billing practices; crack down on unnecessary medical treatments; reduce the system’s susceptibility to lawsuits, fraud and conflicts of interest; and cut down on the number of uninsured drivers through more affordable rates.
“The main issue for me is a lack of choice,” Outman said. “You have a choice when purchasing any other insurance policy. Whether it is health insurance, life insurance or insurance for your business, you have options based on your specific needs and your budget. With no-fault, that is simply not the case. The promises of the original law are just not there, and it’s time we moved on to a more modern system.”
SB 1 was approved by the Senate with bipartisan support and will now move to the House of Representatives for further consideration.