AUTO INSURANCE REFORM

The Issue:

Detroit drivers spend up to 36% of their income on car insurance.  A University of Michigan study found the average Detroiter spends $5,414 annually on car insurance. That is not affordable for many and a huge burden.

On May 24, 2019, Michigan’s Legislature passed a landmark bill that would cut our country’s highest auto insurance premiums by letting approximately 7 million drivers opt-out of a one-of-a-kind requirement to buy unlimited medical coverage for crash injuries. But, will the insurance make good on the legislation that will become effective in July 2020?

Shri’s Solution:

I will work to make sure the insurance industry lives up to the savings promised to Michigan drivers. I will further work to ensure that the guaranteed rate reductions for every motorist happens and that insurance companies offer real choices for personal injury protection (PIP) levels, because on average, PIP makes up half of auto insurance premiums in our state.

I will also hold insurance companies accountable for ending the use of non-driving factors in setting rates such as education and credit scores.

What does the new auto insurance reform law mean? A driver choosing to stick with unlimited coverage is supposed to see a 10% PIP reduction. Someone who fully opted out would get a 100% cut, if they have health insurance, and potentially also avoid paying much of a $220 annual per-vehicle fee that reimburses car insurers when severely injured motorists’ expenses exceed a certain amount.

People on Medicaid would have to get at least $50,000 in benefits and would pay 45% less. People picking one of two other options — $250,000 or $500,000 of coverage — would see a 35% or 20% reduction.

The PIP rates rollback will start in July 2020 and last for eight years. It could amount to $120 to $1,200 in savings for someone paying $2,400 annually per car, assuming the PIP fee accounts for half their bill, according to projections.

If the rollbacks and guarantees do not pan out, I will work to propose legislation that is workable and lifts the hardship of sky high insurance that can cause people to stop driving altogether which further limits their ability to get to school, work and doctor’s appointments.

The Issue:

Detroit drivers spend up to 36% of their income on car insurance.  A University of Michigan study found the average Detroiter spends $5,414 annually on car insurance. That is not affordable for many and a huge burden.

On May 24, 2019, Michigan’s Legislature passed a landmark bill that would cut our country’s highest auto insurance premiums by letting approximately 7 million drivers opt-out of a one-of-a-kind requirement to buy unlimited medical coverage for crash injuries. But, will the insurance make good on the legislation that will become effective in July 2020?

Shri’s Solution:

I will work to make sure the insurance industry lives up to the savings promised to Michigan drivers. I will further work to ensure that the guaranteed rate reductions for every motorist happens and that insurance companies offer real choices for personal injury protection (PIP) levels, because on average, PIP makes up half of auto insurance premiums in our state.

I will also hold insurance companies accountable for ending the use of non-driving factors in setting rates such as education and credit scores.

What does the new auto insurance reform law mean? A driver choosing to stick with unlimited coverage is supposed to see a 10% PIP reduction. Someone who fully opted out would get a 100% cut, if they have health insurance, and potentially also avoid paying much of a $220 annual per-vehicle fee that reimburses car insurers when severely injured motorists’ expenses exceed a certain amount.

People on Medicaid would have to get at least $50,000 in benefits and would pay 45% less. People picking one of two other options — $250,000 or $500,000 of coverage — would see a 35% or 20% reduction.

The PIP rates rollback will start in July 2020 and last for eight years. It could amount to $120 to $1,200 in savings for someone paying $2,400 annually per car, assuming the PIP fee accounts for half their bill, according to projections.

If the rollbacks and guarantees do not pan out, I will work to propose legislation that is workable and lifts the hardship of sky high insurance that can cause people to stop driving altogether which further limits their ability to get to school, work and doctor’s appointments.

shri thanedar

SHRI THANEDAR FOR STATE REP

Use Your Power. Join Our Movement.

SHRI THANEDAR FOR STATE REP

Use Your Power. Join Our Movement.