Lawmakers Looking To Change How Auto Insurance Works - WLNS TV 6 Lansing - Jackson | Your Local News Leader

Lawmakers Looking To Change How Auto Insurance Works

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(WLNS) - Michigan democrats say three things can help change auto insurance for the great lakes state- protection, affordability and transparency.

6 News Nick Perreault caught up with democrats who explain their plan for auto insurance reform.

These democrats say their plan will improve insurance policies for drivers across the state.

"These 13 bills will improve the insurance market in Michigan,” said State Representative Kate Segal (d), Battle Creek.

State Representative and democratic insurance vice chair Kate Segal says first these bills go after those companies who fail to act in good faith and not follow through with promised benefits.

"Consumers in those cases would be entitled to attorney fees and court costs if their suit is successful,” said State Representative Theresa Abed (d), Grand Ledge.

And impose a fine of $1 million to those companies who continually violate the good faith provision.

The next step is regulating how a company comes up with a claim price.

"We will have a bill that would force insurers to justify insurance rates before they are allowed to impose them on customers,” said State Representative Scott Dianda (d), Calumet

And not base rates off credit history, education or occupation.

The package would also protect those employees who bring to light companies who commit bad practice.

"This goes in the opposite direction.”

But Pete Kuhnmuench, the Executive Director of Insurance Institute of Michigan says this package of bills tries to attack problems that simply don't exist.

"A lot of what we are seeing here is recycled old ideas that we've seen before that failed to pass the legislature even with a democratic governor,” said Kuhnmuench.

The Executive Director says these bills only promote more lawsuits, “which are only going to increase costs for everyone, because it costs money for insurers to fend lawsuits when we already have a process in order to address complaints.”

That’s a process that leaves Representative Segal with her own complaint. "Accidents are down and we are driving better as Michigan citizens.”

Auto rates should reflect that. A cost savings hasn't been identified under the plan, but State Representative Segal says in New York with similar legislation, drivers have seen double digit percent drops in annual premiums.

Meanwhile the Insurance Institute of Michigan says states like West Virginia have with similar plans had increased rates.
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