Auto Insurance Reform Likely to See Daylight on Legislative Agenda

Throughout the 2018 general election campaign in Michigan, one key issue that emerged among both Democrats and Republicans was the growing cost of auto insurance to consumers. Michigan has some of the highest insurance rates in the United States, according to Insure.com.

Many contend that Michigan’s no-fault auto insurance system, which provides unlimited lifetime medical benefits to auto accident victims, is the reason insurance rates are among the highest in the nation. Others contend to the need for additional transparency and accountability within the insurance sector. Nearly everyone agrees on the need for a concentrated effort to crack down on fraud, which also has led to increased insurance risks. 

There have been multiple efforts from the insurance sector, health care professionals and consumer groups to provide reforms to Michigan’s no-fault auto insurance system to ease insurance rates for drivers. During the last two decades, those efforts have failed to materialize due to the complexity of the matter. It became even more complex at the end of the 2018 lame-duck legislative session when Quicken Loans founder Dan Gilbert implied he would support a ballot initiative in 2020 to address the high cost of auto insurance. The question remains: Will there be a collaborate effort to make meaningful changes in 2019?

Both Senate Majority Leader Mike Shirkey, R-Clarklake, and Speaker of the House Lee Chatfield, R-Levering, have signaled that insurance reform is a top priority for the Republican state Legislature. More recently, Shirkey confirmed the signal, saying the reform will be his caucus’ “No. 1 priority.” Additionally, Shirkey said he believed the reform would rank highly in the House. Democratic Gov. Gretchen Whitmer also discussed this issue on the campaign trail, specifically as it relates to residents in the city of Detroit. Whitmer indicated that she wants to see real relief and not just a temporary solution.

Whatever solutions state lawmakers agree upon, it is a policy item worth keeping an eye on in 2019.

The Insurance Capital of Michigan

Lansing is recognized as the Insurance Capital of Michigan, making any insurance policy issues in the state Legislature especially important to our region. Greater Lansing is home to leading insurance providers including Jackson National Life Insurance, AF Group, Delta Dental, Auto-Owners Insurance, Farm Bureau Insurance of Michigan and Michigan Millers Mutual Insurance.

The Lansing insurance sector accounts for more than 10,000 jobs, representing nearly 20 percent of the total insurance workforce in the state. To ensure continued growth, there has been tremendous collaboration between the business and education communities in our region to attract future talent to the industry. Some examples of this collaboration include:

Insuring MI Future is an organization that works to attract young talent to a career in the insurance industry in Michigan.

Olivet College, which has a top-ranked insurance and risk management program, partnered with the Lansing School District and Charlotte Public Schools.

Lansing Community College and Michigan State University have recently launched new insurance programs and degrees.

The Lansing Economic Area Partnership recently launched the PROTO InsurTech Program, which focuses on growing insurance technology companies in the Greater Lansing region. InsurTech is a business accelerator platform offering equity investment, expert guidance and connectivity with insurance industry leaders to technology startups geared toward insurance solutions.

As the state Legislature begins its work in the 100th legislative session, we encourage Whitmer, legislative leaders and the Capital Caucus (Senate and House members representing the capital region) to look at the collaborative examples being done right here in the Lansing region as it relates to partnerships and achieving real solutions related to insurance, health care, talent and workforce development.

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