CPAN statement on SB 1014 and 787: Auto Insurance Bills Passed by State Senate Would Make Children, Seniors, Young Professionals & Others Second-Class Citizens

Legislation Would Shift Cost of Care Resulting from Catastrophic Car Injuries to Michigan Taxpayers

Lansing — The Michigan Senate today passed Senate Bills 1014 and 787, which would erode protections for residents who suffer catastrophic injuries in car accidents and shift the cost of care to Michigan taxpayers. SB 1014 addresses the Assigned Claims Plan (ACP) and would cap the cost of care to $400,000. SB 787 would offer a so-called “carve-out” for senior citizens that in reality severely decreases their protections. The bills fail to address the real factors behind the state’s high auto insurance rates.

Coalition Protecting Auto No-Fault (CPAN) President John Cornack issued the following statement in response to the Senate’s last-minute ramming through of these bills just before the Senate leaves for the summer to begin campaigning.

“These bills would turn anyone who doesn’t own a car into second-class citizens, and the cost of their care would be shifted to Michigan taxpayers. This legislation would severely harm children, seniors, bicyclists and others who rely on public transportation, such as young professional living in downtown Detroit.

“We are extremely sensitive to what Michigan drivers pay for auto insurance, particularly those who live on a fixed income, such as seniors. Unfortunately, this legislation does not adequately address the high costs of insurance in this state and does nothing to guarantee rate reductions.

“CPAN has fought for the creation of a balanced fraud authority, one which will fight fraud on all sides. This legislation, however, would protect only one side — insurers. Insurers win and consumers lose because the legislation would not investigate fraud in all forms.

“The bills passed by the Senate today do not provide comprehensive reform to address the costs in the auto no-fault system, including real factors behind Michigan’s auto insurance premiums: the discriminatory practice by insurance companies of using factors like credit scores, occupation, ZIP codes and gender to set rates.”

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The Coalition Protecting Auto No-Fault (CPAN) is a broad-based coalition of organizations representing consumer advocacy groups and health care professionals of all political persuasions. These organizations are united to preserve Michigan’s model no-fault auto insurance system and to make sure that the Michigan auto insurance industry kept the original no-fault promise it made to Michigan citizens when the No-Fault Act was passed in 1972.

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