Michigan lawmakers have introduced a package of auto insurance reforms they claim will cut car insurance rates by between 20% and 30%.
The package, backed by a bipartisan coalition of 15 legislators, is still being finalized and will probably include 12 bills, according to Republican Rep. Ben Frederick. However, its key piece of legislation will be a fee schedule.
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The fee schedule would tie medical reimbursement rates for auto-crash victims to 185% of the reimbursement rate for workers’ compensation, according to an MLive.com report. That cap wouldn’t apply at Level 1 trauma centers, so victims could still get specialty care.
“Michigan citizens are suffering from paying the highest auto insurance rates in the nation,” said Rep. Ed Canfield (R), who will propose the legislation. “Every week I receive letters and comments from my constituents, people in my committee, asking me to address no-fault.”
Other components of the reform package include:
- Limiting factors insurers can use to set rates. For instance, it would prohibit auto insurers from charging some drivers more because of their zip code or gender.
- Requiring auto and health insurance to coordinate.
- Creating a fraud authority to investigate fraudulent activity.
The legislation has received the support of the Coalition Protecting No-Fault, an organization that has opposed previous efforts to reform Michigan’s no-fault insurance system.
“While we have not yet seen the final bills, this is the closest we have seen to a complete no-fault reform package in a long, long time,” John Cornack, the organization’s president, said in a statement.
But insurers claim the touted cost savings just aren’t there, MLive.com reported.
“We’re still reviewing the proposal, but it doesn’t appear to offer any cost savings to drivers struggling with the nation’s highest auto insurance premiums,” said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan.
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