Bumstead: Auto insurance bill is historic reform.
By Sen. Jon Bumstead, 34th Senate District
People have been angry with the ridiculous cost of their auto insurance well before this last campaign season. This isn’t a new issue that rose from campaign promises. This has been an issue since I was in the state House and well before that.
The original no-fault law was enacted in the 1970s and promised Michiganders a host of things, savings being chief among them. But after decades of unmanageable costs, Michigan drivers began to say, “we have had enough.”
It didn’t end there. Rates continued to rise and inflate the bubble until we reached Jan. 1 of this year and decided enough was enough. The very first bill of this session was aimed at reforming no-fault to try to get some relief to drivers here in Michigan. However, the plan wasn’t simply to scrap no-fault and move to a simpler, cheaper system. We recognized the benefits that no-fault provides to traumatic accident victims and that quality of care isn’t something we should just cast aside.
Instead, we opted to focus on choice. When purchasing any other type of insurance, you have options available based on your specific needs and what you can afford. The no-fault system was so burdensome for hardworking Michigan families because they were only allowed to choose top-tier care that many of them couldn’t afford.
Under the legislation that the Legislature approved and Gov. Gretchen Whitmer recently signed into law, drivers will have the choice to select coverage that best meets their needs and budget and seniors will be able to have Medicare cover health care expenses stemming from an auto accident. Individuals with private health insurance will also have this option.
The new law goes beyond giving drivers options when choosing their rates. It also seeks to address the several other factors that have driven up our rates.
Aside from the government-mandated coverage, the most common complaint about the no-fault system is the ridiculously unreasonable inflation of medical care. We have seen examples of procedures costing two, three, four times as much as they would if there were no car involved.
The new law will also reduce the number of uninsured drivers, a goal that if successful, will help lower costs associated with the system and reduce fraud and frivolous lawsuits. Insurance companies will also no longer be able to use certain non-driving factors when setting their rates.
I am proud to have supported this bill as it moved through the process. My colleagues and I held hours of testimony, had hours of discussion with one another and with our constituents and were able to finally get this done for Michigan families.
Sen. Jon Bumstead, R-Newaygo, represents the 34th state Senate District, which includes Muskegon, Newaygo and Oceana counties.