CPAN urges Governor Whitmer to protect consumers and veto HB 4397

CPAN urges Governor Whitmer to protect consumers and veto HB 4397

Cornack: Demand a robust and open debate on reforms that lower rates but protect coverage

LANSING, Mich.—(May 14, 2019)— The Coalition Protecting Auto No-Fault (CPAN) is calling on Gov. Gretchen Whitmer to protect consumers and veto HB 4397, which was passed at 2 a.m. last Thursday without any public hearings or debate. To support the need for a veto, CPAN also sent the governor a summary of 20 reasons why the bill creates more problems than it solves.

In a letter sent to Gov. Whitmer, CPAN President John Cornack noted that the bill strips consumers of important rights and benefits currently available, and does not guarantee a reduction in the total cost of consumers’ auto insurance premiums.

“The process that the House and Senate Republican leaders undertook last week is an abomination of participatory democracy and fairness to the citizens of our state,” Cornack said. “Even worse however, is the policy contained in the proposals.”

Some of the problems outlined in CPAN’s analysis included with the letter are:

  • No guarantee that the total cost of auto insurance will go down: HB 4397 only provides a short-term mandate that the no-fault portion of consumers’ insurance premiums will decrease. If HB 4397 becomes law, there will be many ways in which other portions of auto insurance premiums will become more expensive.
  • Children will lose their existing rights to lifetime coverage: Under Michigan’s current no-fault law, virtually all Michigan children involved in motor vehicle crashes have the right to lifetime medical care, regardless of whether their parents are insured with Michigan no-fault insurance. HB 4397 strips children of these critically important health care rights.
  • Lifetime coverage will become unaffordable: With far fewer individuals in the uncapped benefit pool, the cost of uncapped benefit policies will increase substantially. Therefore, the bill will result in fewer consumers having the ability to secure the benefit of lifetime coverage. Many will be forced to rely on other sources of insurance, including Medicaid and Medicare, to fund their care for auto-related injuries.
  • It preserves redlining:HB 4397 does nothing to change or limit what is known as “redlining,” the insurance practice of charging consumers in certain areas of Michigan, such as Detroit, much more for auto insurance than those who live across the street in a neighboring municipality. The bill allows these practices to continue in the same way they have for the past several decades.

The entire bill analysis can be found here.

“We strongly urge Gov. Whitmer to veto this lopsided political fiasco and demand a robust and open debate on reforms that will attain all of our goals: to make auto insurance more affordable and to ensure we take care of those catastrophically injured in auto accidents,” Cornack said.

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