LaFave outlines auto insurance efforts

LANSING — State Rep. Beau LaFave said he is working on two options for lowering car insurance rates in Michigan.

Recently LaFave and House colleagues sponsored legislation containing eight bills that combined will repeal Michigan’s no-fault car insurance system.

LaFave’s plan allows Michigan drivers to have more say in the insurance coverage they choose by adding more flexibility. Drivers would still need to purchase insurance to drive, but the system would become a full tort system. The plan is comprised of eight bills, House Bill 4397 through House Bill 4404, each covering an area of no-fault insurance legislation.

“Each bill would need to be signed into law,” said LaFave.

H.B. 4397 aims to eliminate no-fault law and once passed, will make the other bills easier to pass. H.B. 4398 focuses on revising requirements to reflect elimination of no-fault insurance. H.B. 4399 covers insurance required under the Limousine, Taxicab and Transportation Network Company Act. H.B. 4400 focuses on buses, H.B. 4401 revises the requirement to belong to the catastrophic claims association, H.B. 4402 concerns vicarious liability of Albion College for volunteers, H.B. 4403 concerns vicarious liability of nonprofit corporation for volunteers, and H.B. 4404 covers torts, liability and damages for motor vehicle liability.

On March 19, all bills were referred to the Committee on Insurance. Each bill needs H.B. 4397 to pass before they can continue.

LaFave’s House Bill 4024 was submitted to the House Committee on Insurance Jan. 10. It amends 1956 PA 218 — the insurance code of 1956 — making miscellaneous changes. A couple changes proposed in the bill include, controlling fees not to exceed customarily charged fees for the same services, and any person or institution rendering treatment is not eligible for payment or reimbursement of more than 100 percent of the amount payable for treatment.

According to LaFave the medical field and trial lawyers make money from the Michigan no-fault car insurance system now.

H.B. 4024 would also require Insurers to file their premium rates with Michigan for review. If they were unable to show a reduction in price per vehicle, the insurer would need to explain why.

LaFave is hoping to put H.B. 4024 on the ballot for November 2020, allowing the electors of the state to vote and make the decision. According to LaFave, it’s not the preferred way.

“But it’s just political enough to work,” he said.

The state of Colorado discontinued its no-fault insurance and saved the residents 35 percent.

“Michigan has the potential to save more than Colorado,” said LaFave.

When the Michigan Catastrophic Claims Association (MCCA) said it was raising the mandatory fee, that covers unlimited medical benefits for catastrophically injured drivers, from $192 to $220, LaFave was upset and disagreed with Governor Whitmer’s idea to audit the association.

“Auditing the MCCA isn’t going to do anything, we need to change the system,” said LaFave.

According to LaFave there was an audit last year.

LaFave is currently working on another bill and will announce it soon.

“I started, and I will continue to make lowering car insurance my number one job,” LaFave said.

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