Asked if he's considering launching a petition drive to put initiative legislation on the 2020 ballot to reform no-fault auto insurance, Quicken Loans Chair Dan Gilbert told MIRS today, "Every option should be on the table to ensure we get the kind of reform that lowers rates and makes our cities and state more competitive."
"Michigan drivers pay the highest rates in the nation -- literally thousands of dollars more annually than across the border in Ohio, primarily, because Michigan is the only state in the nation where drivers are mandated to carry wasteful medical coverage on their auto insurance plan when they already are covered under their health insurance plan," he stated. "Additionally, the law also allows medical services and procedures to be billed at obscene rates when the medical coverage is being paid for by the auto insurance plans," he stated.
The idea drew a variety of reactions.
"We have gone down this path before with insurance-backed ballot initiatives back in 1992 and '94 which the voters resoundingly rejected," said John Cornack, President of the Coalition Protecting Auto No-Fault (CPAN).
Pete Kuhnmuench, executive director of the Insurance Alliance of Michigan, said he thinks it "demonstrates the frustration" people have with the lack of action on the part of the legislature. A ballot proposal would be "quite a large undertaking," but it would just be an up or down vote on whatever plan is submitted, he noted. "Hopefully, you get a better product through the legislative process," he said.
Rep. Lana Theis (R-Brighton), chair of the House Insurance Committee, agreed with Gilbert that every option "should be considered 'on the table,'" but she said she would prefer a legislative fix.
Gilbert indicated he would too, actually.
"Every day we wait is a day too long. There is an important election just weeks ahead, and we are hopeful that it will bring in leaders committed to delivering real reform and relief for all drivers in the state of Michigan," Gilbert said in his statement. "Next to auto insurance reform, there are few if any steps our leaders in Lansing could take that would have more of an immediate, positive impact on the pocketbooks of the majority of Michigan citizens."
But Theis noted that the insurance code is "many hundreds of pages long and extremely complicated," so she sees a reform by initiative as unlikely. "If this were going to be addressed at the ballot, it would likely ask for a yes or no vote on the full repeal of auto no-fault. Based on my discussions at the doors over the last few months, such a measure would pass," Theis said.
Cornack said CPAN already has a plan out there that would address the problem. "We have put forth a comprehensive and well thought-out reform package known as the Fair and Affordable Package that can, and should, be used for legislative reforms that are necessary to improve and reduce auto insurance premiums for Michigan drivers. This includes cost containment, effective rate regulation including use of non-driving rating factors and transparency of state's insurance industry and regulatory system," Cornack stated.
Kuhnmuench said he'd have to know what was in the proposal before he could say whether his Insurance Alliance would endorse it. But the keys points insurers want to see included in any reform is choice for drivers in the level of their PIP coverage, anti-fraud measures and a fee schedule for medical services. "Clearly, what we have on the books is a creature of the legislature and I think the legislature ought to fix it. In our view, we have a broken, outdated no-fault system. It was implemented by the legislature and it can be fixed by the legislature," he said.