Michigan Consumer Advocate Hosts Final Public Hearing in Detroit

Michigan’s Automobile and Home Insurance Consumer Advocate Melvin Butch Hollowell held the final public hearing in Detroit on Saturday, Nov. 15 to hear from consumers and industry experts about the affordability of auto insurance and oversight of the industry. Two public hearings were earlier in November in Bay City and Grand Rapids, Mich.

Co-chairs of the panel included: Michigan Office of Financial and Insurance Regulation (OFIR) Commissioner Kenneth M. Ross, National Association for the Advancement of Colored People (NAACP) Detroit Branch President Rev. Dr. Wendell Anthony, and Focus: HOPE co-founder Eleanor Josaitis.

Hollowell contends that Michigan’s auto rates are some of the hightest in the country and said the he is hosting the hearings to determine if Michigan’s auto insurance rates are affordable and whether Michigan’s de-regulation of the insurance industry allowed for adequate oversight of auto insurance rates.

Testimony from both sides was given. Consumer Advocate Jay Angoff, also of counsel to Roger G. Brown & Associates and former state of Missouri insurance commissioner and Peter Kuhnmuench, executive director of the Insurance Institute of Michigan, both testified.

The Property Casualty Insurers Association of America (PCI) said in a written statement that the series of auto insurance rate hearings on whether auto rates are fair and affordable have not highlighted important facts related to the state’s auto insurance system.

PCI Regional Manager Ann Weber said that Michigan’s auto insurance law offers consumers some of the broadest and most generous benefits in the nation.

“Michigan is the only state in the country that offers unlimited first-party medical benefits to claimants. Given the fact that health care benefits have no limit in Michigan, it should not be surprising that Michigan’s average liability premium is higher than in other no-fault states that do not offer unlimited medical coverage,” Weber said. “Despite this comparatively higher price, however, the average amount for liability and no-fault insurance in Michigan is only 1 percent higher than the national average and falls in the middle third of the nation.”

Weber added that while Michigan has the second highest collision insurance premium in the nation, this is due in part to the state’s broadened collision coverage, which pays for damage to one’s car regardless of fault. The collision loss per insured vehicle in Michigan is highest in the nation, which explains its higher-than average collision premium.

Over the past two years, Michigan rates have fallen faster than the nation as a whole. Michigan’s average liability and physical damage premium dropped 5.4 percent compared to a countrywide decline of only 3.2 percent, Weber said.

“With the turmoil in the financial markets, we do not believe this is the time to make drastic changes to the system, which could create additional negative impacts, such as discouraging companies from competing in the market, which would likely result in higher insurance costs and prices,” Weber said.

Source: Michigan’s Office of Financial and Insurance Regulation, PCI

Topics Auto Legislation Michigan