House approves landmark legislation

State Rep. James Lower today voted to bring lower car insurance prices to residents and families in Montcalm and Gratiot counties, joining House legislators in approving a plan to reform Michigan’s broken no-fault system.

The plan guarantees lower rates for all drivers in Michigan, which now have the highest average car insurance premiums in the nation – twice as high as in neighboring states. The bill offers personal injury coverage options, fights fraud and abuse, and addresses medical costs.

“We’ve finally come together to bring real relief instead of allowing families to endure more financial hardship because of their car insurance bills,” said Lower, of Montcalm County. “This has been a system that has burdened residents for years. The vote today was a great first step as a Legislature to make it clear that it isn’t going to happen that way anymore. I hope the governor agrees that putting more hard-earned money back in the pockets of drivers and reforming this broken system is good for Michigan.”

Michigan’s costs are high largely because it’s the only state that mandates drivers buy unlimited lifetime health care coverage through car insurance. The House plan allows those currently using the coverage to keep it, and those who want it in the future to continue buying it – while providing more affordable options.

The plan:

• Guarantees lower rates on the personal injury protection portion of policies. It would result in a 10-percent reduction within the PIP portion of bills for those buying unlimited coverage, a 30-percent drop for drivers choosing $500,000 in coverage, a 60-percent reduction for those purchasing $250,000 in coverage, and an 80-percent drop at the $50,000 coverage level.

• Allows seniors with retiree health coverage such as Medicare, and those with health insurance policies that cover car accident-related injuries, to opt out of PIP coverage;

• Establishes fee schedules to end the practice of charging far more to treat car accident victims than other patients;

• Cracks down on fraud and abuse by creating a fraud task force;

• Provides more financial oversight of and transparency within the Michigan Catastrophic Claims Association;

• Sets reasonable limits on compensation for attendant care contracts; and

• Helps the state ensure insurance companies charge fair rates, while addressing attorney fee settlements and significantly reducing litigation.

The sweeping legislation now advances to the Senate for consideration.