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Finding the cheapest car insurance may get easier

December 15, 2017 by Steven M. Gursten

Rep. Lasinski (D-Scio Township)’s House Bill 5272 will help drivers find the cheapest car insurance by requiring an annual comparison of MI insurers’ rates

Comparison-shopping to find the cheapest car insurance.

Shouldn’t Michigan’s Insurance Commissioner make it easier for drivers to find the cheapest car insurance?

Of course, he should.

As an insurance and accident attorney, I’ve been calling for an insurance commissioner who works harder for Michigan drivers – not for Michigan’s powerful auto insurance insurance industry.

In 2008, the Insurance Commissioner ceased publication of its “Buyer’s Guide to Auto Insurance,” which was possibly the most pro-consumer thing the insurance commissioner did for state residents. The Guide provided prices for four hypothetical consumers from approximately 60 insurers in each of 16 major Michigan cities.

It made it easy for consumers to find the cheapest car insurance.

And, then, they inexplicably stopped publishing it ten years ago.

Hopefully, the chances of getting the Insurance Commissioner to help out consumers more and insurance companies less just got better, thanks to Rep. Donna Lasinski (D-Scio Township)’s House Bill 5272, which would, arguably, require the state’s top insurance watchdog to post an annual list of all the prices that auto insurers are charging for No Fault car insurance.

Specifically, HB 5272 proposes the following:

  • “[B]eginning January 1, 2018 and each January 1 thereafter, the [Department of Insurance and Financial Services (DIFS)] shall post on the department’s website a comparison of insurance rates … for those lines of insurance that the [DIFS] director determines are of most interest to individual purchasers of insurance.”
  • “[T]he posting under this section must be designed to provide useful information to consumers so that they may make informed comparisons of rates. The posting must include sample policy rates or premiums for sample consumers.”

Now, I know the bill doesn’t specifically mention auto insurance, but I don’t think it’s a stretch to predict that auto is one of “those lines of insurance” that “are of most interest to individual purchasers of insurance.” For the more than 6 million insured drivers in Michigan, No Fault auto insurance is certainly a “line” that is “of most interest.”

Want cheap car insurance? Shop around.

I’m asked all the time as an auto accident and insurance attorney about what insurance companies I like and which ones I see giving people a very hard time. That’s why I publish “What Auto Insurance is Right for Me?,” which is a guide to buying car insurance, and “The Attorneys’ Guide to the Best Auto Insurance Companies,” where I draw on my experience as an attorney to highlight which auto insurance companies people should buy and which ones I recommend they stay away from. The reason I like HB 5272 is it would make shopping around to find the cheapest car insurance much easier.

HB 5272’s proposal for requiring an annual, published “comparison of insurance rates” is a great idea:

  • As HB 5272 aptly states, it would “provide useful information to consumers so that they may make informed comparisons of rates.”
  • Aside from the stand-alone benefit of having a comparison of rates available, the easy access to this information would empower drivers to protect themselves against having to pay higher rates due to insurers’ use of the price optimization strategy (charging more to consumers who are unlikely to comparison-shop and, thus, switch insurers).
  • By virtue of the price-transparency resulting from the annual “comparison of insurance rates,” it’s likely that – through either shame, embarrassment, a desire to not actively and publicly drive business away or a combination thereof – insurers may be less inclined to raise rates or, at least, only do so infrequently and/or minimally.

What’s to say auto insurers will comply with this effort to help drivers find the cheapest car insurance?

So, the big question with this proposed “comparison of insurance rates” is this: What’s to stop auto insurance companies from submitting false information that makes their rates appear to be lower than they actually are?

Wisely, Rep. Lasinski foresaw such a possibility.

That’s why HB 5272 includes a civil fine up to $100,000 for any “insurer that knowingly includes false or misleading information in a filing under this section …”

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