House defeats no-fault auto insurance reform bill

In a Dec. 12, 2012 file photo, the state capitol building is seen in Lansing, Mich.

LANSING, Mich. (AP/WOOD) — Legislation to reduce the cost of auto insurance in Michigan has been defeated in the state House.

The bill was rejected 45-63 Thursday night in the Republican-led chamber.

The measure, which passed a committee vote last month, would have let drivers opt out of a requirement to carry unlimited medical benefits through their auto insurance for crash injuries. It sought varying cuts in personal injury protection — or PIP — fees for motorists choosing less coverage.

PIP premiums makes up just less than half of your total insurance bill, so a 10 percent reduction to the current unlimited benefit plan would reduce your overall payment by just less than 5 percent. For a $500,000 cap on PIP, you would receive a 20 percent reduction in that portion of your premium. If you took the lowest PIP at $250,000, your reduction would be 40 percent, or just less than 20 percent of your total cost.

Supporters say the bill would help drivers who face the highest premiums in the country. Opponents say it would give insurers wiggle room to avoid guaranteed rate rollbacks and lead to inadequate treatment for people with brain and other catastrophic injuries.

Republican leadership wanted the whole House to vote on the matter before adjourning for the week, but as so many times before, the roadblock was finding consensus and the 55 yes votes needed to push the bill through to the upper chamber.

Republicans couldn’t come up with 55 votes of their own. The opinions of two Republican West Michigan lawmakers are representative the problem before party leadership.

State Rep. Mary Whiteford of Allegan said the plan reduces cost and that’s a priority for her constituents.

“Over about two years, I knocked on over 13,000 doors in Allegan County. The No. 1 issue I heard over and over again was the high cost of auto insurance and I kept hearing more and more about people who couldn’t  afford it and dropped their insurance, she said.

But state Rep. Chris Afendoulis of Grand Rapids Township said the plan had no guarantee of lower rates and there are other options.

“I think there is a bipartisan support for the current system, but there is bipartisan support that it needs to have some changes and I think that if we could get beyond just looking at one bill,” he said.