Legislature approves historic auto insurance reform; governor plans to sign

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LANSING (WJRT) (5/24/2019) - The Michigan Legislature is passing historic auto insurance reform aimed at reducing premiums in the state that have ranked as the highest in the United States.

The Republican-led Legislature developed the proposal with Democratic Gov. Gretchen Whitmer. The State House voted 94-15 to approve the plan on Friday and the Senate voted 34-4 in favor of the bill later in the day.

Whitmer has said she will sign the legislation into law after the Memorial Day holiday.

The new law includes lower car insurance rates, lower medical costs, and options for drivers to pick their own health care covered included on their auto insurance.

Michigan has long had the highest rates in the country. This new law is expected to change that, allowing drivers to opt out of paying for catastrophic claims insurance and lifetime health care after a crash.

Depending on how much medical coverage a driver selects, the House Republicans estimate drivers could save on average of $120 to $2,400 a year on auto insurance.

The final draft also eliminated the influence of non-driving factors on premiums that insurers charge, such as gender, credit score and zip codes.

Some Democrats who voted against the legislation believe it doesn't go far enough to lower rates and protect motorists.

Republicans and Democrats have spent weeks negotiating before agreeing on the new law. Democrat State Rep. Sheryl Kennedy of Genesee County is hopeful the changes will encourage people who don't have insurance to get it.

She said motorists also will need to get better educated on the various options available under the law and better understand how their auto insurance coverage overlaps with their health insurance.

"A system that does not have guarantees we grew up with, so they're going to have to know a lot more about car insurance, they're going to have to know a lot more about health insurance and how the two systems work together and they're gonna have to learn about the court system because potentially suing the driver, which is something we haven't had to deal with too much except in extreme cases," Kennedy said.

She expects to host a number of informational sessions for residents in her district to educate drivers on the new law over the next year or two, as the changes are rolled out.

Kennedy also mentioning this law isn't perfect - she expects fine tuning before its fully in place.

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