Richardville votes against a bill that would have increased insurance rates for local residents
LANSING—Sen. Randy Richardville today voted against legislation that would have increased auto insurance rates for three out of four Michigan drivers.
Senate Bill 166 would have prohibited territorial insurance rating, which considers geographically based risk factors when setting insurance premiums.
“The majority of Michigan residents are facing extreme economic challenges,” said Richardville, R-Monroe. “They cannot afford to pay their current bills. How could they afford a considerable rate increase on their auto insurance?”
Under territorial rating, the factors used to set insurance premiums include traffic density, claiming behavior, auto theft rates, the percentage of uninsured motorists, and others. Because risk is higher in certain areas than in others, rates are higher in certain areas and lower in others.
Richardville said if territorial rating were prohibited, some residents would see only slight rate increases, but most others would be hit with significantly higher increases. Rates in Monroe would rise by 9 to 11 percent, while Jackson rates would increase by 33 to 40 percent.
“I support insurance reforms that protect Michigan drivers,” Richardville said. “Constituents in my district, however, should not be forced to subsidize the premiums of drivers in high-risk areas.”
The auto insurance industry in Michigan would neither gain nor lose money if territorial rating were eliminated; the overall claim losses and total premiums collected would remain the same.
Posted: Wednesday, October 28, 2009
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