car insurance

Democrats Reveal Plan To Lower Auto Insurance Rates By 40%

Under the current no-fault system, Michigan has the highest auto insurance rates in the nation

May 16, 2019 - 1:49 pm

(WWJ) As promised, Michigan House Democrats introduced a new auto insurance reform plan Thursday with a promise to drop rates 40%. It's an answer to the Republican plan in the Senate, which has no savings guarantee but drops the imperative to pay for catastrophic coverage as part of premiums.

What's not in the Republican plan in the Senate are things Detroit Mayor Mike Duggan and Michigan Gov. Gretchen Whitmer have long championed -- Eliminating zip codes and credit scores as factors in the individual price of insurance.

Democratic state Representative Sherry Gay-Dagnogo, D-Detroit, says they're going to end discrimination in their auto insurance package.

"We will deliver reduced insurance rates and value to every Michigander," Gay-Dagnogo said in announcing the plan.

The latest plan, called D.R.I.V.E, creates a consumer protection fraud authority as part of a "holistic" approach to Michigan’s auto insurance system.

Per a release, the D.R.I.V.E. plan would:

  • Lower Rates by 40% – Guaranteed rate reduction for all drivers by requiring insurance companies reduce rates by 40% off the total bill.
  • Base Rates Only on Driving Factors – End red-lining and the use of discriminatory non-driving factors. Prohibit insurance companies from using zip code, marital status, education level, home ownership status, gender or credit score from being used to set rates.
  • End Insurance Fraud – Create a consumer protection fraud authority that can take on fraud within the system and hold perpetrators accountable.
  • Keep Strong Health Care Coverage – Maintain full Personal Injury Protection accident coverage for all drivers.
  • Reduce Lawsuits – Extend the amount of time claimants have to file a claim from one to three years.
  • Lower Rates for Seniors – Recognize Medicaid and other lifetime retirement health care as an alternative to PIP coverage as long as the alternative includes long-term care coverage.
  • Increase Transparency – Hold a microscope to the Michigan Catastrophic Claims Association so drivers know how rates are set.
  • Lower Medical Costs – Give drivers a discount for coordinating their auto insurance with their health care.

“Detroiters know better than most how high Michigan’s auto insurance rates are,” said Gay-Dagnogo. “Our D.R.I.V.E. Auto Insurance Plan takes that reality into account and guarantees an end to discriminatory rate-setting and lowers insurance rates for all drivers. A guaranteed forty percent rate reduction puts real money back in the pockets of drivers where it belongs, and we can get it done without compromising quality or coverage.”

Per the plan, on average, drivers would save $2,283 in Detroit, $1,014 in Lansing, $1,571 in Flint, $951 in Grand Rapids and $768 in Marquette.

“Since joining the legislature in January, I made it my priority to talk to my constituents and tackle the issues that matter to them,” said state Rep. Tyrone Carter, D-Detroit. “It could not be more clear that reducing auto insurance rates is the top priority for the people of my district and across southeast Michigan. Our D.R.I.V.E. plan will deliver historic car insurance reform and lower rates by forty percent or more for all drivers. It’s time to roll up our sleeves and pass this legislation to deliver the rate relief drivers need.”

The question is, does it have a chance to pass? 

There is no word yet on how Republicans feel about the plan, or if there is common ground between the GOP plan and this new one from the Dems.

WWJ Lansing Bureau Chief Tim Skubick says there is a glimmer of hope, however, with negotiations now going on behind the scenes.

"This is a major development in the sense that if you're talking, there is always the chance of a deal," he reported, Thursday afternoon. "There's no guarantee, but the two Republican leaders appear to be all in on sitting down with the governor and once and for all finding solutions on cost savings for Michigan motorists."

"They aren't there yet," Skubick added, "but this is a major, major step in that direction."

What we do know is that under the current no-fault system, Michigan has the highest auto insurance rates in the nation -- about $2,400 per year on average, which is nearly $1,000 above the national average. Michigan is also the only state that requires seniors to buy duplicative coverage, costing them between $600 and $1,000 each year.

Tricia Kinley, executive director of the Insurance Alliance of Michigan, criticized the Democrats' plan for reform. 

"It’s false advertising to promise savings without including real reforms to crack down on fraud and abuse by trial attorneys who profit off the status quo, rein in overcharging by big hospitals and give consumers a choice in their level of medical coverage,” she told