Detroit Democratic Caucus Announces Auto No-Fault Bills

*Bills create transparency, fight fraud, save motorists' money

DETROIT - Detroit Democratic Caucus Chairman Representative Thomas F. Stallworth III (D-Detroit), joined by Detroit Democratic Representatives Brian Banks (D-Harper Woods), Phil Cavanagh (D-Redford Township), Fred Durhal Jr. (D-Detroit), David Nathan (D-Detroit), Rose Mary Robinson (D-Detroit), Harvey Santana (D-Detroit), Alberta Tinsley-Talabi (D-Detroit), and Rashida H. Tlaib (D-Detroit) announced their own auto no-fault reform package that would save Michigan residents money while fighting fraud and demanding transparency from the insurance industry. The legislators announced their legislative package at a Detroit press conference where they were joined by local church leaders and Detroit residents.

“Michigan’s auto insurance policies are completely broken,” said Stallworth. The fact that 30 percent of Michigan drivers and 60 percent of Detroit drivers are uninsured when combined with the fact that Michigan’s auto insurance industry is the second most profitable in the nation is a clear indication that rates are excessive.”

Detroiters pay some of the highest auto insurance rates in the nation.

The Detroit Democratic Auto No-Fault Package would:

• Restructure the board with public interests instead of insurance interests. Create a commission to track fraud, waste and abuse. Collect the MCCA assessment at the Secretary of State instead of through insurance companies. (Cavanagh)

• Require insurance companies to justify rate increases before they’re imposed on drivers and stipulate that 80 percent of premiums collected must be spent on clients. (Stallworth)

• Prohibit the consideration of credit history, education and occupation in determining premiums and surcharges. (Tinsley-Talabi)

• Allow refunds ordered by a commissioner and allow private parties to sue when auto insurance overcharges their policy holders. (Tlaib)

• Disallow steerage to collision shop owned by the insurance company. (Banks)

The Republican-sponsored no-fault bill, which was recently voted out of committee with no Democratic votes, would offer a savings of $125 per vehicle that is only guaranteed for one year. That bill would also eliminate unlimited medical benefits for the most seriously injured accident victims and, instead, cap those benefits at $1 million. The Republican bill dissolves the Michigan Catastrophic Claims Association (MCCA) after it has paid out its final claim, and creates the new Michigan Catastrophic Claims Corp (MCCC) to collect a fee from auto owners and handle new claims when the bill becomes law. The MCCA will still collect an annual fee from drivers to cover a $2 billion deficit they claim.

“Drivers are tired of paying high premium yet want to keep the benefits they are currently receiving from our auto no-fault system. Replacing the MCCA with the MCCC and capping everything for a guaranteed one-year savings of $125 is not helping anyone but the insurance companies,” said Cavanagh. “Gutting the system is not reform. We looked into every aspect included in a no-fault policy to see where real changes resulting in real savings could be made.”

“With the proposed changes to Michigan’s Auto No-Fault system affecting every driver in the state of Michigan, we looked at the entire picture to come up with reform that would result in actual savings without hacking up the system,” said Banks.

“The unfortunate situation, in many cases, is that a car insurance premium is often higher than the value of the car,” said Tlaib.” Making auto insurance more affordable throughout Michigan, but particularly in urban regions, should be one of the state’s top priorities.

The Detroit Democratic Caucus will also host an Auto No-Fault Reform Town Hall Meeting to discuss proposed changes to the system and how that will affect every driver tonight, Monday, May 20, from 6 to 8 p.m., at Salem Memorial Lutheran Church, 21230 Moross Road at Chester in Detroit.

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