State Rep. Gary Glenn today joined the House Insurance Committee in approving legislation that will guarantee auto insurance rate reductions for all Michigan drivers.
Glenn said the bill should end Michigan’s tenure as the state with the most expensive auto insurance in the nation by offering motorists personal injury protection coverage options, reining in medical costs, fighting fraud and sparking increased competition in the market. All drivers would be guaranteed lower rates on the PIP portion of their policies, with the savings increasing at lower coverage levels.
The savings could be greatest for seniors, who would not need PIP coverage at all if they already have lifetime health insurance such as Medicare.
“We’re fixing a broken system with a long overdue mandatory rate reduction and greater freedom of choice for drivers,” Glenn, of Williams Township, said after the vote. “Seniors with Medicare will no longer be forced to buy excess coverage.”
Glenn noted that some auto insurance companies don’t do business in Michigan because of the state’s current law, but regulators appear confident more companies would enter the market if this bill passes.
“This legislation would spark additional competition,” Glenn said. “Market forces would help reduce premiums even beyond those prescribed by this legislation.”
Michigan currently is the only state in the nation mandating drivers buy unlimited personal injury coverage through their auto insurance. The bill approved by the Insurance Committee continues benefits for Michiganders already receiving lifetime health care after a catastrophic traffic accident. The plan also gives drivers the option to continue buying unlimited personal injury protection coverage, or buy more affordable alternative plans.
All drivers would be guaranteed lower rates on the PIP portion of their policies. The bill calls for a 10 percent reduction for those buying unlimited coverage, a 20 percent drop for those choosing $500,000 in coverage, and a 40 percent drop at $250,000 in coverage.
“I think it’s the No. 1 issue legislators hear about – drivers are tired of living in the most expensive automobile insurance state in the nation,” Glenn said. “I’m looking forward to an end of that era.”
House Bill 5013 advances to the House floor for consideration.