Michigan Democrats attempt to stem high auto insurance costs
Legislative proposal would impose new restrictions on auto insurance companies
In response to auto insurance costs that are the second-highest in the nation, Michigan Democratic representatives have introduced a proposal that would establish new rules for insurance companies.
The plan, introduced in the state house on Monday, would allow the state insurance commissioner to veto insurers’ rate hikes, says the Detroit Free Press. Consumers whose insurance rates were unfairly increased would be eligible for refunds. And insurers would have to offer low-cost plans to Michiganders with good driving records and would no longer be able to use credit scores to calculate drivers’ premiums.
Democratic State Representative Bert Johnson said that “insurance companies have taken every opportunity to charge Detroit residents the highest rates in the state.”
Insurers blasted the proposal, calling it “political grandstanding.” The Insurance Institute of Michigan proposed an alternative plan that would allow drivers to carry less medical coverage on their auto insurance policies; at present, Michigan is the only state mandating unlimited medical coverage in auto insurance plans.
Only New Jersey has higher auto insurance costs than Michigan, say Democrats in the state.
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Posted: November 30, 2009
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