A Michigan lawmaker’s push to mandate a 10% reduction in auto insurance premiums has sparked concern from the insurance industry, which warns the proposal could destabilize the state’s recovering market.
Senate Bill 328, introduced by Sen. Jeff Irwin (D-Ann Arbor) on May 29, would require insurers to reduce total premiums by at least 10% on any newly issued or renewed auto policy without reducing coverage. A companion bill, SB 329, would bar insurers from applying reinstatement fees or rate hikes for policy lapses.
The American Property Casualty Insurance Association (APCIA) criticized the proposal, arguing it would undo the positive momentum generated by Michigan’s 2019 no-fault insurance reform law.
Citing recent National Association of Insurance Commissioners (NAIC) data, the APCIA noted insurers are still paying out $1.04 in claims and expenses for every $1 collected in premiums.
“The most recent NAIC data shows that the market is improving in Michigan,” said Joe Roth, APCIA’s assistant vice president for state government relations. “A rollback would abruptly send the positive trend into reverse.”
Roth also referenced a study by AM Best, which found that between 2019 and 2022, personal auto insurance premiums in Michigan dropped by 12%, while the national average increased by 5%.
Irwin, however, said the legislation is necessary to protect consumers from what he called excessive insurance costs. “It’s time for the Legislature to stand up to these unjustifiably high car insurance rates,” he said.
SB 328 is co-sponsored by eight Senate Democrats and one Republican. The bill has been referred to the Senate Committee on Finance, Insurance, and Consumer Protection but has not yet received a hearing.
According to the APCIA, the 2019 reforms successfully reduced claims costs and attracted more insurers to the market, giving consumers more coverage options. “SB 328 will destabilize the market and harm drivers,” Roth said. “The bill will raise costs for Michigan drivers and hurt working families.”
