Members of the House Select Committee on Reducing Car Insurance Rates took another step in reforming the state’s auto no-fault system on Wednesday, May 15, adding language from the House proposal into its Senate counterpart. Substituting language from House Bill 4397 into Senate Bill 1, members added the following provisions not included in the Senate version: defined relief on personal injury protection and the allowance of the Michigan Department of Insurance and Financial Services (DIFS) to prevent non-driving factors from being used to set rates.
The motion to adopt the substitute was unanimous, but the reporting of the bill to the House floor saw three Democratic no votes. Representative Terry Sabo (D-Muskegon) praised Committee Chair Representative Jason Wentworth (R-Clare) for the way in which he ran the research and substitution process in “trying to find something that we could agree on.”
Though some were expecting a vote on the bill on Thursday, May 16, House Speaker Lee Chatfield (R-Levering) and Senate Majority Leader Mike Shirkey (R-Clarklake) announced they have had “productive conversations” with Governor Gretchen Whitmer and so, “in good faith” no vote was taken last week. Both leaders noted they expect conversations and negotiations will continue over the weekend and feel confident a solution can be agreed upon. Governor Whitmer echoed that sentiment and noted she is open to supporting the option of allowing Michigan drivers to choose the level of personal injury protection coverage, a change from the current mandatory unlimited benefit.
While Republican leaders and the Governor continue negotiations, members of the House Democratic Caucus proposed their own no-fault reform proposal. In their plan, the use of ZIP codes, credit scores and other non-driving factors would be prohibited when setting rates and a consumer protection fraud authority would be created. Also, the plan would extend the amount of time a claimant has to file their claims to three years from the current one-year time frame. For those coordinating health care coverage with auto insurance, discounts would be allocated, and drivers would see a 40 percent rate cut (which would occur by allowing seniors to opt out of PIP and eliminating fraudulent activity).