Dear Neighbor,
I’m Jeremy Moss, your State Senator. I’m honored to be in Michigan’s Capitol representing our community as we work to build a government that makes us proud. It’s an honor to serve you and your family, and I place a high priority on remaining accessible, accountable, and transparent.
This newsletter aims to provide you with information on sweeping changes made to our no-fault insurance system and what I’m doing to bring down costs.
If I or my staff can be of help, or if you want to stay informed about my work at the Capitol, please contact us. Sign up for my email updates online at SenatorMoss.com or call me at (517) 373-7888.
Jeremy Moss, Democrat
State Senator, District 11
Assistant Democratic Leader
Fast-Tracked and Short-Sighted: No-Fault Auto Insurance Reform
There were three versions of the bills proposed by the majority — and each version was unveiled only hours before a vote. These bills failed to stand up to public scrutiny and the process is an affront to the open government for which I advocate.
On Friday, May 24th, the majority in the legislature rushed through the final version of Senate Bill 1 to overhaul Michigan’s no‑fault auto insurance system. On Thursday, May 30th, that bill was signed into law, making dramatic changes to Michigan’s auto insurance system by encouraging people to gut their health coverage in order to reduce their auto insurance bills.
I could not support legislation that forces drivers to give up essential health care coverage in order to temporarily reduce their car insurance rates. I believe we can better regulate the insurance industry without jeopardizing our access to necessary health care, and I will continue to work to find better solutions that reduce our auto expenses while ensuring that our families, businesses, and communities have the means and connections they need to thrive.
Why I Opposed the New Changes to No-Fault Not a Good Deal for Our District
- COVERAGE: The lifesaving insurance that auto accident victims need may collapse when people leave the unlimited system. People who choose less coverage don’t also get to choose which accidents they get into. Coverage shouldn’t be compromised for those who need it.
- RELIEF: The rate relief is not on your full bill, only the PIP line item. And it’s not on your full bill, only the state’s average. So, if you live in Metro Detroit, this rate relief will only save you a fraction of a line item from a bill that is already lower than yours.
- REDLINING: The bill will outlaw discrimination in billing based on ZIP codes. However, it will still allow certain territorial zones to exist – areas which can be drawn even more narrowly to discriminate in billing.
- PROCESS: Three versions of roughly 100 pages of no-fault auto insurance system changes were written overnight and only released for public vetting a few hours before a vote. It will impact just about everyone in Michigan, and there was only one 47-minute committee hearing that took place on the first version.
A Summary of What You Can Expect
Personal Injury Protection (PIP) Benefit Coverage Level Options
Senate Bill 1 now encourages the dismantling of robust medical care after an auto accident by allowing people to leave the unlimited coverage system and choose:
- Coverage that caps after $500,000 of medical expenses
- Coverage that caps after $250,000 of medical expenses
- Coverage that caps after $50,000 of medical expenses for individuals on Medicaid only
- Opt-Out for qualified persons with qualified health coverage (Medicare Parts A & B)
- Enhanced Coordination: Allow for an applicant or named insured who has selected the $250,000 PIP benefit coverage to reduce his/her PIP benefits premium by 100% if the named insured, his/her spouse, and all relatives domiciled in the same household have health coverage that will cover injuries related to an auto accident. (Currently PIP covers more services than individual health coverage such as in-home help, therapy, etc. This essential coverage will not be available once an accident victim’s expenses exceed their chosen PIP level of coverage.)
Rate Rollback
The rate relief is not on your full bill, only the state average of the PIP line item, and the relief is only guaranteed for eight years.
- 10% reduction for unlimited PIP coverage plans
- 20% for $500,000 PIP coverage plans
- 35% for $250,000 PIP coverage plans
- 45% for $50,000+Medicaid PIP coverage plans
- 100% for Medicare Opt-Out or for Enhanced Coordination as described above
Rating Factors
Prohibits insurers from using sex, marital status, home ownership, credit score, educational level attained, occupation, or postal code when establishing rates on any type of auto insurance policy.
Note that while the use of ZIP codes is prohibited, insurers will still be able to draw any other territory as a rating factor. This is an important difference that may limit price spikes occurring between adjacent ZIP codes, but not prohibit the overall use of territory by an insurer when establishing rates.
QUESTIONS?
Contact the Michigan Department of Insurance and Financial Services at (877) 999-6442 and be sure to keep an eye on their website, Michigan.gov/DIFS, for additional information about the new no-fault auto insurance law.
What I’m Doing Bills I Support
I co-sponsored legislation that would bring transparency to how Michigan auto insurance companies set drivers’ insurance rates and require them to consider driving-related factors first — and weight them more heavily than other variables.
Senate Bill 88 would require all auto insurance companies selling auto insurance in Michigan to set auto insurance rates for drivers based on the (1) individual’s driving record; (2) number of miles driven annually; and, (3) years of driving experience. These three factors must be weighted with the highest weighting going to the first factor of the three and the others in descending order.
The bill is modeled after California’s rating factor system which was put in place after the passage of Proposition 103 in 1988. According to the Consumer Federation of America, auto insurance rates decreased in California between 1989 and 2010 while the national average went up 43.3%.
I’ve also sponsored bills in the past to ban a shady insurance industry practice called ‘price optimization,’ which prevents consumers from seeing rewards and discounts to which they might be entitled. This practice allows insurance companies to set rates based on the maximum amount they believe a driver would tolerate paying, not based on actual driving factors. Twenty other states have outlawed this billing gimmick.
On the Rise: Michigan Catastrophic Claims Association Fee
Recently, the Michigan Catastrophic Claims Association (MCCA) — the fund that pays for the costs of someone catastrophically injured in a car accident — announced an annual rate increase from $192 to $220. In response to this increase, Gov. Gretchen Whitmer ordered an accelerated state audit.
Given my overwhelming support for transparency and the fact that the MCCA is neither subject to the Open Meetings Act, nor the Freedom of Information Act, I fully support the audit request. An increased MCCA fee does nothing more than put an additional burden on working families who are already struggling to make ends meet. We deserve to know what the MCCA is doing with their money before any more fee increases are given the green light.
In addition to my support of the MCCA audit, I support the concepts introduced by my colleagues in Senate Bill 11 that would:
- Force the MCCA to return any excess funds directly back to drivers, and
- Place a cap in the amount of $6 a year that the MCCA can raise rates.
Infrastructure Update: Senate Roads Budget Full of Potholes
Michigan’s roads are some of the worst in the country, and our crumbling infrastructure causes residents to pay out-of-pocket for car repairs, vehicle wear-and-tear, and more. The potholes and failing bridges hurt drivers and our businesses.
Gov. Gretchen Whitmer put forth a $2.5 billion solution to fix Michigan’s roads and bridges. Her proposal included substantial, concentrated investments in the Michigan Department of Transportation budget to revamp funding formulas so that heavily traveled local roads, such as those in Oakland County, would receive corresponding funds. Our district would be a big winner in the proposed road investment.
Unfortunately, the majority in the legislature has indicated this plan is dead on arrival, yet continues to fall short of a long-term, sustainable plan to fix our roads — and not just continually patch them.
The safety of southern Oakland County residents is a huge concern to me, and I’ll continue to be engaged with the Governor and legislative leaders to find the most sustainable, least burdensome option to fix our roads. Any plan must include transparency and accountability on the money already spent for roads, along with new funding that’s intended to fix them.
“I live five streets away from Eight Mile Road in Southfield and the discriminatory redlining that unjustly impacts Detroit enters into my district, as well — in Southfield, Oak Park, Ferndale and elsewhere. But gutting no-fault and lifesaving medical coverage will not end redlining… and it will not reform all of the inefficiencies in the insurance industry that keep our rates high.” -Senator Jeremy Moss on the Senate floor, May 2019
Get to Know: The Transportation Asset Management Council
The Transportation Asset Management Council (TAMC) is a resource for independent, objective data on the condition of Michigan’s roads and bridges. TAMC maintains online dashboards that depict the condition, operation, and investment in Michigan’s public road system, as well as an investment reporting tool that provides detailed information on current road and bridge projects.
Visit Michigan.gov/TAMC to learn more and view interactive maps on the latest road and bridge conditions.
STATE SENATOR JEREMY MOSS
Toll-free: (855) DIST011 (347-8011) | Email: SenJMoss@senate.michigan.gov
The printed edition of this newsletter was published in August 2019.