Duggan's auto insurance relief would drop rates, cuts medical benefits

- Michigan lawmakers in Lansing are expected to vote on Thursday on a bill that would reshape car insurance rates in Michigan. It's a plan pushed by Detroit Mayor Mike Duggan but others worry it will leave victims under-insured.

In 1973 the Michigan Legislature said that everyone who drives a car in Michigan must have no fault auto insurance. But for years, those living in Detroit paid substantially more for no-fault insurance than those out state.  

"Detroiters are tired of the conversation, they just want their car insurance premium to come down and I think most people in the state feel the same way," Mayor Duggan says.

According to the city, the average Detroiter pays between $3,400 and $3,600 each year for a basic auto insurance policy. Statewide, the average is $2,400 each year.

Duggan says legislators have promised to make changes and drivers are tired of the promises without the delivery.

"People of Michigan are tired of legislators running for election, promising to cut car insurance and then coming up here and not getting it done," Duggan said.

Getting it done would mean giving up unlimited medical benefits, which currently exist under the law.

Those benefits have helped people like Justin Anderson was hit by a car while crossing the street. He spent almost two years in a coma and suffers from a tremendous head injury that his mom, Bonnie, said requires the need to relearn basic functions.

"He could not do basic things like set up, swallow his own saliva, eat any food, he was tube fed," Bonnie said.

Aside from the hospitals, doctors, and treatment, Justin needed many things that his no fault insurance provides that medical insurance did not. 

"Transportation in some sort of vehicle, a ramp to get them in and out of the house. Those are just the basics," Bonnie said. 

She said that without the current no fault coverage, Justin will suffer.

There are three major tenants of the proposed Duggan plan: 1) drivers can choose the amount of medical coverage they want - between $250,000, $500,000, or unlimited; 2) bills for doctors and hospitals are capped and tied to Medicaid rates; 3) Insurance companies must cut rates between 20% to 50% depending on the policies. Beyond that, an anti-fraud authority would be created to crack down on abuses. 

If your bills go beyond the coverage allotment, Duggan says other insurance like your health insurance or Medicare will cover  the rest.

So are there enough votes to pass this reform?

"As long as we get rate major rate relief I think we're open to compromise. We've got some forces up here that don't want major rate relief because they want the money," Duggan said.

The vote is expected Thursday in Lansing.

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