by Tyler Arnold
The Michigan House and Senate passed auto insurance reform Friday with substantial bipartisan support after the House Republicans, Senate Republicans and Democratic governor struck a deal.
Gov. Gretchen Whitmer is expected to sign the bill into law.
The legislation will eliminate a mandate that required all drivers to purchase unlimited, lifetime personal injury protection (PIP) coverage. The unlimited PIP coverage mandate is unique to Michigan and caused the state’s average rates to be nearly double the national average. Detroit drivers paid nearly four times the national average. The PIP coverage accounts for nearly half of a driver’s insurance bill.
After Whitmer signs the legislation, drivers will be able to choose from five PIP rate options and insurance companies will be required to lower their rates accordingly. A driver could choose to get rid of all of their PIP coverage, but only if he or she has private health insurance that covers auto accident injuries for the entire family, or the driver is an older person on Medicaid. They would save 100 percent on their PIP rates.
Drivers could also choose to opt into $50,000 worth of coverage, which will be accompanied by a 45 percent rate reduction. A plan that includes $250,000 worth of coverage will receive a 35 percent rate reduction and $500,000 worth of coverage will guarantee a driver a 20 percent rate reduction. Drivers that choose to keep full coverage will still receive a 10 percent rate reduction.
Drivers on Medicaid would be required to purchase a minimum of $50,000 in coverage or more.
The legislation also included certain provisions pushed by Democrats that will prohibit insurance companies from discriminating based on some non-driving factors, such as marital status, gender and zip code. Insurers could still use some other geographical information in factoring rates.
There was generally bipartisan agreement, but some Democrats voted against the legislation, saying it did not go far enough.
Rep. Phil Green, R-Millington, said that the legislation provides needed reform as premiums continue to rise throughout all of Michigan. He said the legislature should look at further reforms, but encouraged his colleagues to join him in voting to reduce rates.
Rep. Leslie Love, D-Detroit, also voted for the legislation. During the debate period on the House floor, Love said that she agreed with her Democratic colleagues that the legislation did not go far enough, but that the bill will lower rates by eliminating what she called an “oppressive mandate” for unlimited PIP coverage.
Although Love said that some of the discriminatory factors in rate pricing concerned her, she said the legislature “cannot allow perfect to be the enemy of the good.”
Reps. Isaac Robinson, D-Detroit, and Yousef Rabhi, D-Ann Arbor, dissented from the Democrats.
During Debate, Robinson yelled that “we have been disrespected” and that “corporate special interest” were running the show in the legislature. Rabhi called his speech a eulogy for the state’s insurance program and said that the mandate ensuring full coverage “stood up for our neighbors and our residents and our family members for decades.”
Sen. Marshall Bullock, D-Detroit, while debating on the Senate floor, said that no legislation is perfect, but that he is happy that Michigan’s Democrats and Republicans could solve one of the state’s largest problems over the course of two weeks.
Senate Majority Leader Lee Chatfield, R-Levering, said that drivers can purchase the same coverage they have now, but for less money, and that the legislation gives them even more options for less expensive coverage.
“What about those people who can’t afford car insurance?” he said. “This is a solution for them.”
Several Democratic amendments on the bill were struck down. It passed the House 94-15 and the Senate 34-4. It will now head to the governor’s desk.
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Tyler Arnold reports on Virginia, Ohio and Michigan for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.