Rate Increases: Reviewing Democrats' No-Fault Reform Bills

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The last several posts have reviewed the bills presented by members of the House Democratic Caucus to reform Michigan’s No Fault statutes. So far, the posts have addressed efforts to make the insurance industry more transparent and to prohibit insurance companies from dictating who does the repairs. This post will discuss three bills that cover the most important thing to consumers: insurance rates.

The first of the three bills, HB 4511, introduced April 9, 2013, would prohibit insurance companies from using credit card information or your credit score to deny or cancel your insurance coverage or to determine your insurance premium or payment options. Without the bill, the insurer can use that information as long as it tells you it is going to do so.

Next, HB 5456, introduced on April 17, 2014, would very simply bar rate increases or surcharges based upon prior insurance claims caused by potholes. The bill does not explain how the company should determine that cause, though.

Finally, HB 5461, introduced on April 23, 2014, would require insurance companies to file copies of their rate manuals with a director 15 days before putting them into affect. The director will review the rates and determine whether they comply with existing law preventing unfair insurance payments. If there is a problem with the rate manual then the insurance companies would not be allowed to use it in deciding your insurance rates. This 15 day advanced notice gives the director a chance to block unfair charges before you get stuck paying more than you should.

The House Democratic Caucus has promised more bills that will affect rate increases – including a bill to prevent companies from counting prior claims against you if you are not at fault. Those bills have not yet been introduced, so look for future posts reviewing the rest of the Democrats’ plan for No-Fault insurance reform. If you believe the insurance company should be more closely regulated, contact your state representative and tell him or her to support these bills.