Michigan Proposes Bills to Lower Auto Insurance Premiums and Ease Coverage Reinstatement

Michigan legislators have introduced two bills aimed at addressing the state's high auto insurance costs by implementing premium reductions and removing barriers for drivers seeking coverage after a lapse. Senate Bill 328 proposes a 10% reduction in premiums for new or renewed policies based on rates approved under the Michigan Insurance Code, while maintaining current coverage levels without reduction due to the lower premiums. Senate Bill 329 focuses on prohibiting insurers from imposing reinstatement fees, denying coverage, or increasing rates solely due to previous insurance lapses, facilitating easier re-entry into the insurance market for drivers who may have experienced financial or health-related challenges.

Both bills were introduced in May and assigned to the Senate Committee on Finance, Insurance, and Consumer Protection. The legislation aims to reduce the number of uninsured drivers in Michigan, which currently exceeds the national average, by removing penalties for coverage lapses and making insurance more affordable. Data from 2020 to 2022 shows a 6% reduction in uninsured motorists in Michigan, attributed in part to a temporary ban on penalizing those seeking coverage after lapses.

These initiatives respond to consumer difficulties in maintaining continuous auto insurance, emphasizing affordability and access. The proposed policy changes could influence insurance company practices, regulatory frameworks, and market dynamics within the state. By stabilizing rates and easing coverage reinstatements, the bills intend to improve overall compliance and reduce financial risk among drivers.

This legislative approach reflects ongoing efforts to balance insurer profitability with consumer protection in Michigan's auto insurance market. It highlights the regulatory focus on enhancing affordability and reducing uninsured driving, which carries broader implications for insurance claims, premiums, and public safety in the state.