An economic consequence of “bad faith” legislation is highlighted, according to the coalition.
According to a new research from the American Property Casualty Insurance Association (APCIA), insurance reforms now being considered by the Michigan legislature could substantially increase rates for customers.
According to the APCIA analysis, premiums for all forms of insurance might rise by 11-21 percent as a result of the proposed revisions in House Bill 4681 and Senate Bill 329, which open up 35 new legal options for action against insurance companies.
According to APCIA, this would cost anywhere from $2.4 billion to $4.7 billion. Auto insurance premiums for the state’s 7.2 million drivers could increase by as much as 40% if the proposed revisions are enacted.
As part of an opposition alliance to the two legislation, ACPIA has released a research. It is joined in its criticism of the proposed revisions as “bad faith” by a number of local enterprises, trade associations, and non-profit organisations. The Don’t Touch MI Rates organisation claimed on its website that doing so would “open the litigation floodgates and force unnecessarily high settlements,” resulting in higher revenues for the trial bar at the expense of consumers.
Executive v.p. of the coalition member Home Builders Association of Michigan Dawn Crandall expressed concern that low-income homeowners will be hit hardest by the price increases.
“More low-income people would be at risk of financial ruin in the event of a car accident, house fire, or other emergency,” he stated, explaining the consequences of not having insurance.
Also sounding a note of caution about the two legislation was Tim Daman, president and chief executive officer of the Lansing Regional Chamber of Commerce. “This is the last thing people need,” Daman remarked.
Jared Burkhart, CEO of Big I Michigan, pointed out that small company owners could be negatively affected by the proposed changes as well as customers.
According to Burkhart, “this study notes that these proposed bills could lead to escalated costs for consumers and businesses across the state, increase fraud, and open the litigation floodgates.”
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