Mich. Auto Bill Aims to Lower Insurance Cost for Low Income

NU Online News Service, June 24, 2:24 p.m. EST

Low-income drivers in Michigan could get a break on their auto insurance if legislation introduced by two state senators is successful.

State Sen. Virgil Smith, D-Detroit, has introduced a bill allowing low-income drivers to choose limits on their personal protection insurance.

Under Michigan's no-fault auto law there is no limit on PPI payouts and it is a lifetime benefit, contributing to the state being one of the more expensive in the country for auto insurance.

The bill, Senate Bill 514, would allow low income drivers (defined as anyone whose gross income does not exceed 300 percent of the federal poverty line) to purchase limits between $50,000 and $100,000 on their PPI. Drivers must also have a clean driving record to participate.

The low-cost coverage would be a pilot program to be established in a major urban center.

 Peter Kuhnmuench, executive director of the Insurance Institute of Michigan, says this is a program the insurance industry would be very interested in examining.

The bill, which was introduced on June 22 and co-sponsored by Sen. Joseph Hune, R-Hamburg, chairman of the Senate Insurance Committee, has been referred to the insurance committee.

Kuhnmuench says Smith has shown an eagerness to find ways to reduce premiums for the state's drivers and, along with Hune, is very knowledgeable about the issues the industry faces. He says the senator has sought ways in the past to introduce programs, similar to California, to give low income drives an opportunity to save on their insurance and work on programs to reduce the number of uninsured in the state.