Arguing that the proposed new law would raise insurance rates for good drivers while rewarding repeat driving offenders, the Insurance Alliance of Michigan today has called on the Michigan Senate to oppose SB 837. The bill, which they say will cause good drivers to pay more even while rewarding the bad actors on the road, was reported from the Senate Transportation Committee this morning.
Pete Kuhnmuench, who serves as Executive Director of the Insurance Alliance of Michigan, argues, “This bill should not have advanced because it will penalize good drivers by raising their auto insurance rates while keeping poor drivers on the road longer, and members of the Senate should oppose the bill.” Kuhnmuench adds, “This bill fundamentally weakens Michigan’s point system that serves as a deterrent to unsafe driving and encourages drivers to obey the rules of the road.”
The bill would allow drivers to take a driver improvement course once every three years, instead of once in their lifetimes. However, a new report from the Michigan Secretary of State clearly demonstrates that the courses fail to improve driver safety. Data recently released by the Secretary of State shows that of the drivers who took a driver improvement course in 2016, only five percent were less likely to have another traffic violation. Even worse, SOS data shows accident rates for those who took a driver safety course actually increased.
The cost of auto insurance is determined by the risk each driver brings to the system. Accurate driving records are used to assess risk. Drivers with worse driving records have higher auto insurance premiums because they bring more risk to the system.
The Insurance Alliance of Michigan was just formed last year, in 2017, when the Michigan Insurance Federation and Insurance Institute of Michigan joined together. The agency is headquartered in downtown Lansing and represents property/casualty insurance companies that annually underwrite more than $12 billion in insurance. IAM member companies provide insurance to approximately 90-percent of the property/casualty insurance market in Michigan.
The agency’s purpose is to serve the Michigan insurance industry and the insurance consumer as the key resource for legislative and public information on property/casualty insurance issues.
