Michigan proposal would provide a 20 percent auto insurance rate reduction
Private group Fair and Accountable Insurance Rates is hoping to lower insurance costs for Michigan residents.The Detroit News reports that the Board of State Canvassers approved the language of a private group's proposal to require insurance companies to slash auto insurance rates 20 percent.
The group, Fair and Accountable Insurance Rates, has 180 days to circulate petitions. If they can get 304,000 signatures in that time, the proposal will become a ballot initiative in a future election.
Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, said that he opposes the initiative but recognizes that it would be "tough to fight" on a ballot. He called the proposal "unrealistic," suggesting that any industry would be hard-pressed to remain solvent if it saw a 20 percent drop in its profits.
In addition to the 20 percent rate cut, another 20 percent would be lopped off for people with good driving records. And consumer protections would be bolstered, as well.
FAIR is pushing for a reduction in Michiganders' auto insurance costs because the state has the 14th-highest auto insurance rates in the nation. According to the News, Detroit residents pay $5,000 per year for auto insurance - $1,200 higher than second-place Philadelphia.
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Posted: November 10, 2009
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