Auto Insurance Companies Sock Consumers with Half-Billion in Rate Increases in 2022
Auto Insurance Companies Sock Consumers with Half-Billion in Rate Increases in 2022
Hutchings: Any way you look, no-fault reform is an unmitigated disaster
LANSING, Mich.—(Oct. 12, 2022)—While Michigan’s auto insurers tout alleged savings brought on by no-fault reform, the truth is they continue to jack up prices on consumers—to the tune of nearly a half-billion dollars in 2022 alone.
Research commissioned by CPAN on 35 auto insurers in Michigan, representing 3.5 million policyholders, found that the insurers collectively had $498,977,294 in rate increases approved by the Michigan Department of Insurance and Financial Services (DIFS) since the beginning of 2022. Two additional rate hikes that will cost Michiganders about $68 million are awaiting approval from DIFS.
Douglas Heller, who conducted the research and serves as director insurance at the Consumer Federation of America, noted that the rate increases had nothing to do with the recent Court of Appeals decision which found that that benefit reductions passed as part of 2019 auto insurance reforms could not be applied retroactively. All of the increases were filed with the Department of Insurance and Financial Services well before the court ruling.
“There’s a reason the auto insurance lobby has fought so hard against fixes to the new auto insurance law—it’s given them the green light to indulge their greed with massive rate hikes and then look for someone else to blame for the increases.” Heller said. “Michigan consumers can expect further gouging unless DIFS and the Michigan Legislature steps in to hold insurance companies accountable for their discriminatory pricing practices.”
Meanwhile, the humanitarian crisis caused by the new law continues to grow. A study released in September by the Brain Injury Association of Michigan (BIAMI) and conducted by the Michigan-based public health institute MPHI found that since the 45% cut in catastrophic care and 56-hour per-week cap on family provided attendant care went into effect in July 2021:
Six survivors had died
78% reported a loss in services
42 patients reported hospitalizations directly related to changes brought by reform
Devin Hutchings, president of CPAN, said it was clear that auto insurance reform has failed.
“Any way you look, the new no-fault law is an unmitigated disaster,” Hutchings said. “While Michigan residents are already dealing with record inflation, insurance companies are sticking it to them with shocking premium increases—all while depriving critically injured survivors of the care they need. It’s shameful behavior that must be addressed by DIFS and the Legislature.”