CPAN urges Gov. Whitmer and DIFS to Protect Auto Insurance Policyholders and Stop Deflecting Public’s Attention

CPAN urges Gov. Whitmer and DIFS to Protect Auto Insurance Policyholders and Stop Deflecting Public’s Attention

Hutchings: Governor should stop doing PR work for auto insurance industry 

LANSING, Mich.—(Nov. 16, 2021)—CPAN, the consumer protection organization fighting for fairer insurance laws, today called on Gov. Gretchen Whitmer and the state Department of Insurance and Financial Services to refocus its efforts on protecting auto insurance policyholders and investigating credible reports of transgressions committed by auto insurance companies.

CPAN President Devin Hutchings said that Gov. Whitmer and DIFS Director Anita Fox were attempting to redirect the public’s attention from the devastating impact of Michigan’s new auto insurance law by highlighting alleged “savings” for motorists in a press release issued today.

“Gov. Whitmer and her administration should be investigating auto insurance companies, rather than doing their PR work for them,” Hutchings said. "Gov. Whitmer took a statistic handed to her by the lobbying arm of the auto insurance industry and hyped it in an attempt at a feel-good political win. Michigan drivers need to look more closely for the statistics that really count -- whether they individually are seeing any meaningful savings, even as auto crash survivors pay the price for auto reform through lost care."

Hutchings pointed to numerous media reports showing that insurance companies have effectively denied and delayed claims to providers for months, hastening the collapse of the entire post-acute care industry. In addition, a recent report from the Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ) found that Michigan policyholders were overcharged by $1.2 billion in 2020, as miles driven, vehicle crashes and auto insurance claims dropped due to pandemic shutdowns and job losses.

“Gov. Whitmer and legislative leaders are continuing to put lipstick on a pig, but Michigan residents see through the spin,” Hutchings said. “It’s clear that auto insurance reform has been a complete disaster to anyone who looks closely. Thousands of people have lost needed care—care that was contractually guaranteed to them, based on the auto insurance premiums they paid. Auto insurance companies are continuing to break the rules, just like they were before. And auto insurance policies simply remain unaffordable for too many Michiganders, especially those who live in urban areas.”

While the Governor’s press release touts $1 billion in savings—a data point she received from the auto insurance industry—Hutchings said the vast majority of those dollars came from the reduction of the Michigan Catastrophic Care Association (MCCA) assessment, meanings families saved only about $140. The purported savings announced by the Governor represent statewide averages, which hides the fact drivers in Detroit and other urban areas in Southeastern Michigan have seen no real relief and their premiums remain completely unaffordable.

Meanwhile, the 45% reimbursement cap on specialized rehabilitation services for auto accident victims—which was passed as part of auto insurance reform—has created an unfolding and growing crisis in Michigan. Thousands of patients have already lost needed care, while more than 16,000 health care jobs have been impacted. Those numbers will continue to grow.