Bipartisan Plan to Save Drivers Money on Auto Insurance Unveiled

The group, called Drivers for Savings, is making its goal the passage of reforms toMichigan's no-fault insurance law that would give drivers a choice in the level of Personal Injury Protection (PIP) coverage they are required to buy. Currently,Michigan is the only state in the country to require drivers to purchase more expensive unlimited coverage. Allowing drivers to choose between different levels of PIP coverage could save policy owners as much as 16 percent on their auto premiums.

"TheState of Michigan requires drivers to purchase expensive and rarely used insurance coverage that puts the cost of auto policies out of reach for many drivers struggling inMichigan's economy," State Senator Alan Sanborn, R-Richmond, sponsor of the legislation, said. "With the cost of gas and groceries going up, this legislation helps bring the cost people pay for insurance down."

Chairman of the House Insurance Committee, Rep. Virgil Smith, D-Detroit, added: "For too long, many drivers, especially in urban areas, have had to choose between buying insurance and going without in order to afford other things they need for their families. In this state we need comprehensive auto insurance reform. I believe offering consumers a choice on their level of personal injury protection coverage is a positive first step in that direction."

Under the Drivers for Savings legislation (Senate Bill 1278), policyholders would be allowed to choose the amount of medical coverage under PIP at levels beginning at $50,000 up to $400,000 or to retain their current unlimited coverage. This would be a choice policyholders would have to make proactively. If no lower amount of coverage is chosen, a policyholder maintains unlimited coverage.

"People are better off when they have the power to choose what's best for them and their family," said Congresswoman Carolyn Cheeks Kilpatrick, D-Detroit. "It doesn't matter where you live, you should be empowered with the choice to buy a more affordable car insurance policy that will protect you and your family and not be forced to spend more than you can afford."

The Drivers for Savings coalition is made up of elected officials from both parties, as well as business groups, law enforcement associations and influential community organizations in theCity of Detroit such as the Detroit Urban League, the Detroit Association of Black Organizations and the Booker T. Washington Business Association.

"The Drivers for Savings legislation would provide an opportunity for drivers to significantly reduce their premium rates while preserving Michigan's successful no-fault insurance law," said Wendy Block, Director of Health Policy and Human Resources for the Michigan Chamber. "We fully support these market-friendly and consumer-driven reforms because they insert choice into the marketplace and encourage individuals and businesses to educate themselves and pick the policy that best fits their pocketbooks and individual needs."

While offering drivers options in their coverage, the plan's $50,000 minimum level still maintainsMichigan's place at the top of the list of benefits offered in no-fault insurance states, and auto insurance studies have shown 95 percent of all auto claims are less than $50,000.

"For many of our members, the cost of insurance is a big factor in their company's bottom line," said Rob Fowler, president and CEO of the Small Business Association ofMichigan. "As an organization, we joined this effort because makingMichigan a better place to do business is a mission of ours and this legislation helps accomplish that."

Jewel Ware, Chairwoman of theWayne County Commission and senior citizens advocate said. "The savings will be a great benefit to senior citizens, who are especially vulnerable to the effects of rising costs for everything. Many seniors live on fixed incomes and with high prescription drug costs, food and gas prices, auto insurance may be cut from their already limited budgets. The ability to choose an appropriate level of personal injury protection will allow seniors to be able to drive with affordable insurance coverage, and maintain their independence a little longer."

From a law enforcement perspective, reducing the number of people driving with no insurance is an important part of the Drivers for Savings plan.

"We've seen estimates as high as half of all drivers in some parts of the state who are put in the position of breaking the law and driving without insurance because they don't have the option of purchasing coverage they can afford," said Terrence Jungel, Executive Director of the Michigan Sheriffs' Association. "As those often involved in responding to an accident or enforcing traffic laws, we think any plan that helps people stay within the law is a good thing and should get the Legislature's quick approval."

Senate Bill 1278 was introduced in the Senate on April 24, and with today's news conference, the Drivers for Savings coalition is launching a statewide grassroots effort to help make the legislation law. People interested in finding out more are encouraged to visit the coalition's website: www.DriversforSavings.com.

SOURCE Drivers for Savings

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