Thursday, 20 March 2008
Michigan Legislature Considers New Auto Insurance Rules
Democrats in the Michigan House of Representatives recently introduced a bill that would put more heavy restrictions on auto insurance companies to ease rates for state drivers.
The first provision of the bill would not allow companies to set auto insurance rates based on credit score, reported the Associated Press and Forbes New York. State lawmakers argue that rates should be set solely on driving record.
The new measure would also give more power to the state’s insurance commissioner. Any rate increases would have to be approved. If rates were determined to be unfair, insurers would be forced to refund their premiums.
“We need to rewrite Michigan [auto insurance] law so it protects consumers,” said state Representative Bettie Cook Scott.
But insurance companies in the state oppose the bill. They say the provisions could actually hurt consumers.
Insurers point out that good credit scores offer more than two-thirds of the state’s policyholders nice discounts.
Because the legislation also makes it easier to sue insurance companies, the costs for an increased number of lawsuits would be eventually passed to the policyholders.
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