Auto insurance

Letter: Let’s see the auto insurance industry deliver its own transparency

For the editor:

In response to the recent opinion piece by Erin McDonough of the Insurance Alliance of Michigan, we applaud the fact that 2019 changes to the no-fault law allow drivers to pay less for auto insurance in Michigan. But it’s the height of irony that the insurance industry applauds accountability and transparency for accident victims and healthcare providers, while refusing to be held to the same standards. Today, there is virtually no transparency in setting premiums and disclosing actual profit margins.

Michigan’s first no-fault court cases compared auto insurance companies to utility companies for a reason. There is great potential for abuse and excessive charges from utilities and insurance companies. But while utility companies are now carefully regulated about what they can charge consumers, there is no sunlight and no transparency on insurance company profit margins. There’s also very little we can do in Michigan today to stop auto insurance companies from charging “excessive” rates and reaping windfall profits for a product that drivers are legally obligated to take. buy (and that comes with significant criminal and civil penalties when we don’t buy it).

If we are serious about bringing down the price of auto insurance in Michigan today, the reform we need now is true transparency in auto insurance company pricing processes and a change in the law. in that state to give the insurance commissioner the real power to disallow and prevent Michigan auto insurance companies from charging the second highest rates in the nation (Detroit is the city with the highest rates) – a power that almost every other state already gives to their insurance commissioners.

Considering that they are selling a product that their consumers are legally required to buy, auto insurance companies should also be required to provide their annual financial statements to disclose their profit margins and let consumers know how much of their premiums are actually used to pay claims. and how much goes directly to profits. Think back to 2019, when the Legislature was deliberating on changes lawmakers would soon make to the no-fault law – changes that would dramatically reduce the rights and legal protections of accident victims and, ultimately, account, would leave many victims of car accidents without care and without anywhere. turn. Nowhere in all the committee hearings, press releases, and public statements from the House and Senate have we heard of the staggering profits that insurers could make when these proposed no-fault changes became law.

If Michigan drivers are to benefit from long-term savings, it’s time to bring much-needed and long-awaited transparency into the true profitability of Michigan’s auto industry.

Steven Gursten

President and lawyer

Michigan Automobile Law