Proposals to make Michigan auto insurance affordable
Below are proposals that Michigan lawmakers should consider if they are truly serious about making Michigan auto insurance affordable:
- Cap Michigan auto insurance rates (i.e., total auto insurance expenditures, which includes premiums, fees, assessments and charges) at $200 less than the national average.
- If an auto insurer wants to charge a rate in excess of the rate cap, then, as to that insurer, all of the “reforms” in House Bill 4612 are voided and the pre-reform No Fault Law controls.
- Enact a No Fault 80/20 loss ratio rule. Modeled on the federal Affordable Care Act’s 80/20 Medical Loss Ratio, a No Fault 80/20 loss ratio rule would require Michigan’s No Fault auto insurance companies to spend no less than 80% of their insureds’ premium dollars on their insureds’ No Fault benefits or pay refunds to their insureds.
- Enact “Bad Faith” Legislation which would impose on Michigan No Fault auto insurance companies a “duty to deal fairly and in good faith” with their insureds and which would hold insurers “liable for compensatory, consequential, and exemplary damages… costs of litigation, including actual attorney fees” for failure to do so.
- Amend the Michigan Consumer Protection Act to make it applicable to Michigan auto insurance companies. Because the Michigan Supreme Court has ruled that auto insurers are, generally, exempt from the restrictions and sanctions available under the Michigan Consumer Protection Act, Michigan auto insurance consumers have no recourse against Michigan auto insurers who engage in “[u]nfair, unconscionable, or deceptive” business practices.
- Bring Michigan into the 21st century by allowing Michigan auto insurance consumers to collect “punitive damages” from wrongdoing auto insurance companies. Since approximately 1884, punitive damages have been forbidden under Michigan law. Michigan is one of only five states in the country that still does not allow punitive damages. In other words, 45 states allow punitive damage recovery. (https://www.travelers.com/business-insurance/specialized-industries/excess-casualty/docs/punitivedamages.pdf)