Detroit Regional Chamber’s Core Principles on Auto Insurance Reform

With auto insurance debates heating up in Lansing, the Detroit Regional Chamber is highly involved in the discussions working with bipartisan legislators and the governor’s office. The Chamber membership and Board are united in the recognition that the high cost of auto insurance is a critical issue that impacts our state’s economic development, talent attraction, and citizen well-being, and must be addressed.

The Chamber is eager to support legislation that meets the following criteria:

  • Result in a statewide and quantifiable reduction in auto insurance rates.
  • Recognize that rate reduction must be even greater in urban areas. Even a 20% reduction in urban areas leaves auto insurance unaffordable for low-income residents.
  • Reduce the number of uninsured drivers through rate reduction and increased mobility options for low-income residents.
  • Maintain Michigan’s high-quality health care delivery system.
  • Reduce insurance related fraud.

Detroit Regional Chamber Reform Vision

Auto insurance is a statewide issue that demands to be addressed. While our membership does not have a consensus view regarding detailed solutions, the Chamber supports the following core principles.

  • Reform should provide additional oversight of attendant care, particularly when delivered by relatives of the injured.
  • Michigan should pursue insurance fraud at all levels through a strong fraud authority or another enforcement mechanism.
  • Any proposed regulation of reimbursement rates should consider:

– The impact on motorists requiring catastrophic care, particularly care in trauma centers.

– The ability of health care providers to provide quality care.

– The need to lower rates for drivers across geographic, socioeconomic, and other demographic factors.

– Michigan’s insurance rates are high across the state, however, drivers in urban areas are disproportionately impacted. Reviewing the factors that cause high rates should be a special focus of policymakers.

  • Uninsured drivers in high-cost areas, like the city of Detroit, are left with few alternatives to driving illegally because of the region’s lack of effective and efficient public transportation. The number of uninsured drivers is a key component of insurance costs and the region’s consistent failure to provide mobility options has exacerbated the problem.

The Chamber Board endorsed these principles in 2017. The Chamber’s Government Relations team urges that all impacted parties must be at the table and compromise equally – there is no one single aspect of this challenge that can solve this problem – or can escape reform.