Debates begin on Detroit mayor's proposal to cut auto insurance rates
(WJBK) - Critics of Mike Duggan's no fault car insurance rate claim it is not an across the board rate cut for every driver and the proposal was drafted by the insurance industry, while the mayor has a different take on those criticisms.
"It looks like it was completely drafted by the insurance industry. There's nothing but favors in it for the insurance company," said trial lawyer Steven Sinas.
"Mark Bernstein is a trial lawyer and he's supporting it," Duggan said.
The proposal would reduce rates is by ending the requirement that Michigan drivers buy unlimited medical insurance benefits -- no matter whether they already have health care coverage. Drivers could choose to stick with their unlimited coverage, or elect to buy either 250,000 or $500,000 for personal injury protection, which provides coverage on a per-person, per-accident basis. Read more about it here.
The way they plan to reduce rates is by ending the requirement that Michigan drivers buy unlimited medical insurance benefits -- no matter whether they already have health care coverage. Michigan is the only state in the country with this requirement.
Mark Bernstein is a trial lawyer who supports it.
The trial lawyers, the health care field, insurance companies and consumers were out in force as the mayor began his push for a no fault car insurance rate cut.
State Rep. Tim Greimel, D-Auburn Hills, argues not everyone will get a cut.
"Only a very small number of folks would see the 40 percent savings - only those who select very limited, inferior coverage and even then it would not be in place for five years after which insurance companies could jack up the rates again," he said.
Duggan says if you keep your unlimited catastrophic accident coverage there are no savings, but if you select $250,000's worth of coverage there are.
"For most people in Michigan, it is going to be a major reduction in their auto insurance bill," he said.
RELATED: Duggan, officials unveil proposal to slash Michigan auto insurance rates
Insurance industry lobbyist Peter Kuhnmuench says there has to be savings in hospital costs before there is rate rollback and to have a state ordered rollback for five years is price fixing.
"No other industry is faced with this demand, if you will. We've always relied on the free market to set prices," he said. "We're certainly concerned with the 5-year rate rollback."
Five Republican members are in favor, five are undecided and one is against. Three Democrats against and three are on the fence. In other words, the votes to move the bill aren't quite there yet.