LANSING, Mich. (WWJ) -- Detroit Mayor Mike Duggan was in the state's capitol Wednesday, urging lawmakers to work together to pass a bill to reform auto insurance.
Michiganders, on average, pay the highest auto insurance rates in the country, according to Business Insider, and Duggan is among many legislative leaders trying to change that.
Duggan spoke before the Senate Insurance and Banking Committee Wednesday morning, saying it's time for Michigan to reform a law that has required Michiganders to purchase mandatory no-fault insurance since 1972. Duggan testified that much of the costs associated with no-fault insurance go for medical benefits.
“Detroiters have been actively solicited and encouraged to get as much treatment as possible," Duggan said. "You can’t go in our city without seeing billboards saying ‘been in a car accident? Call us.’”
“Car owners in the state of Michigan are the only people in America still paying hospitals usual and customary charges because we can’t get out of the 1972 law,” he added.
Michigan is the only state that requires insurance policies to offer unlimited lifetime medical benefits. It is estimated that 42 percent of monthly premium payments go toward medical coverage. That number was at just six percent at the time the law was enacted, according to a report from the Detroit News.
Sen. Tom Barrett of Charlotte, Mich., says such high auto insurance rates in the state has "criminalized the act of being poor in Michigan." He says Michiganders have been put in an "absolutely impossible situation," where many can't even legally drive themselves to work.
"Then they’re stuck in a position of either breaking the law to provide for their family or not providing for their family at all," Barrett said. "And that, to me, is an absolute shame and it’s something that we as legislators need to correct. This is the biggest pocketbook issue facing our state."
Duggan said he would back legislation, provided it cuts costs by 20 percent, and says he would also support a bill that would prohibit insurance companies from setting rates based on non-driving factors like zip codes.