Some Democratic state legislators from across Michigan are forming a coalition to push for an alternative version of changes to car insurance.
Calling themselves the “Real Deal” caucus, the legislators say current Republican bills jeopardize accident victims’ access to health care, and do little or nothing to address excessive rates, or eliminate the use of non-driving factors like credit scores to set rates.
The coalition urges Governor Gretchen Whitmer to veto those bills.
“Legislation is moving fast in Lansing, and this legislation is terrible. It is a fraud,” said State Representative Isaac Robinson (D-Detroit).
The Democrats say any bills that don’t address what they call “redlining”—setting rates by non-driving factors including zip codes—or remove any requirement to purchase health care as part of a car insurance package, are non-starters.
“If the Republicans were sincere about lowering the rates, they would strengthen language to allow us to prohibit excessive rates, and do something about these discriminatory factors,” said Robinson, who said he will also introduce legislation to make Michigan a “prior approval” state where regulators would have to approve insurers’ proposed rates, rather than a more lax “file and use” state, which is the model Michigan currently follows.
“If it does not ban non-driving factors, it is dead on arrival. If our health care is put at risk, it is dead on arrival.”
State Representative John Cherry (D-Flint) says using non-driving factors to set rates amounts to a “hidden tax” on Michigan drivers.
“When they’re setting rates on a credit score, that’s a hidden tax on poverty. When they are setting rates on zip code, that’s a hidden tax on living in urban communities,” Cherry said. “And that has to end.”
The insurance industry defends its use of non-driving factors by saying its own internal modeling shows those factors accurately predict who will or will not file costly claims.
State Representative Sherry Gay-Dagnogo (D-Detroit) says that if necessary, the coalition will consider launching its own voter referendum to push for their vision.
“We can also put together our referendum, as California did, to address true affordability,” said Gay-Dagnogo.
This means there could end up being competing referendums. Real estate mogul and Quicken Loans CEO Dan Gilbert just announced he’s launching a voter referendum effort with language mirroring the current Republican bills should Whitmer veto them.
The Real Deal caucus does not include all Democrats in the Legislature. Five Democrats in the House and Senate voted for the Republican bills. Four are from Detroit.