Former Rep. McBroom Comments on the

Failure of Auto Insurance Reform Bill

November 2, 2017 Thursday evening the Michigan House of Representatives attempted the first passage of a significant reform to Michigan's auto insurance in more than 20 years. Michigan has long been an outlier in both costs and the one-of-its-kind, unlimited benefit auto insurance. While significant bills have been introduced over the years, HB 5013 was put together with a bi-partisan coalition that included the Speaker of the House and the Mayor of Detroit. Still, when the votes were counted the bill failed 45-63. Former Representative Ed McBroom, a longtime supporter of several attempts at auto insurance reform lamented the failed passage, "The people lost again tonight. Most tragically, those who work against this reform always pretend they don't support the reform offered by saying the same things: there aren't enough reforms here, the savings won't be enough, or some other tale that points out a defect in the plan to feign being on the side of overburdened ratepayers. But the citizens of this state need price relief and this bill would have given price relief around the state, not simply just to Detroit as some are claiming today. Lack of perfection is the most normal excuse for failing to support the plan offered." Representatives from border communities around the state have long been the staunchest supporters because their communities see far more affordable yet effective systems in other states and even see Michigan residents taking advantage of those states' more affordable rates. In an unusual turn, border representative Scott Dianda (D-Calumet) was the only border rep in the House to vote against the bill. HB 5013 proposed giving citizens options to keep the same unlimited coverage for up to 10% savings, or going to $500,000 or $250,000 coverage for savings that would have mandated an average of 40% savings across the state. Only about 1% of accident claims exceed $500,000. Despite the significant savings, this change would have still left Michigan miles ahead of the next highest coverage state of New York at only $50,000 limits. It also would have ended the common practice of hospitals charging more for care given to car accident victims, sometimes four times higher, by setting a fee schedule similar to workmen's comp. Not surprisingly, opposition was particularly strong from hospitals and from downstate rehab centers that are able to charge exorbitant and almost unchecked fees for their services. "Rep. Dianda claims he voted no because this would have only given savings to Detroit and didn't fix all the problems with the system. Well, just reading the bill makes it obvious it would have helped ratepayers right here in the UP tremendously," McBroom said. "I supported many of the other fixes he suggests too, including transparency for the system but that doesn't mean this bill wasn't a good step forward and didn’t offer real, significant cost relief for overburdened UP families and ratepayers. Also, if this bill passed, additional reforms would certainly have gotten further debate in the senate. There was a ton of compromise and bi-partisan work on these bills and the UP deserved a yes vote." Sadly, reforms to auto insurance are likely now dead for this term. Another bill package, introduced by those supporting the current system as a maneuver to stop 5013, is not going to be taken up according to the Speaker. While those bills did have certain elements of fraud detection and transparency, they offered no guaranteed savings or reform for rate payers, a critical component of any reform for over-taxed UP rate payers.