A legislative proposal in Michigan introduces mandatory premium reductions and consumer protection measures for auto insurance buyers.
Senate Bills 328 and 329, sponsored by Sen. Jeff Irwin (D–Ann Arbor), are currently under review by the Senate Committee on Finance, Insurance and Consumer Protection.
SB 328 would require US auto insurers to apply a minimum 10% discount to new auto insurance policies and the first renewal. Insurers would be prohibited from reducing coverage in conjunction with the discount.
The measure seeks to increase affordability without altering consumer protection standards.
The insurance industry opposes the bill, with the American Property Casualty Insurance Association (APCIA) stating that the legislation fails to address underlying cost pressures such as medical inflation and litigation expenses.
According to Joe Roth, APCIA assistant vice president for state government relations, the proposed mandate disregards current market conditions and could disrupt the progress made since Michigan’s 2019 no-fault reform.
SB 328 is detached from the reality of the current market in Michigan. While Michigan is feeling inflation’s impact on auto insurance, the market is still improving since the 2019 no-fault reforms.
Joe Roth, APCIA assistant vice president for state government relations
The 2019 reforms significantly changed Michigan’s auto insurance system by modifying personal injury protection requirements, capping home care reimbursements, aligning provider payment structures with Medicare rates, and establishing uniform reimbursement levels for medical services.
The Insurance Research Council noted improvements in insurance affordability following those legislative changes.
SB 329, the second bill in the package, would prevent insurers from applying reinstatement fees or increased premiums for policyholders reentering the market after a lapse in coverage.
Irwin emphasized that the measure maintains the insurance mandate but eliminates financial penalties that disproportionately affect individuals facing health issues or temporary financial instability.
Irwin argues that easing the process of reinstating coverage can improve insurance participation rates and lower premiums across the board. Citing state data, he said that a temporary suspension of lapse penalties from 2020 to 2022 contributed to a 6% reduction in Michigan’s uninsured driver rate.
Both bills remain in committee pending further legislative action.
