A Michigan legislator has introduced a bill requiring auto insurers to reduce premiums by at least 10% on all new and renewed policies — a move the American Property Casualty Insurance Association (APCIA) warns could destabilize the state's insurance market.
SB 328, introduced by Senator Jeff Irwin on May 29, would mandate that all insurers issuing or renewing auto insurance policies apply a flat 10% premium reduction without cutting policy benefits. A companion measure, SB 329, would bar insurers from imposing reinstatement fees or charging higher premiums due to lapses in coverage.
Joe Roth, assistant vice president of state government relations at APCIA, said SB 328 would reverse the progress Michigan’s insurance market has achieved since the state enacted no-fault reforms in 2019.
“The most recent NAIC data shows that the market is improving in Michigan, although insurers are still averaging $1.04 in claims and expenses for every dollar of premium, a roll back would abruptly send the positive trend in to reverse,” said Roth. “Now is not the time to put Michigan on the same path towards a disrupted insurance market like California.”
Irwin, a Democrat from Ann Arbor, said the bills aim to curb insurer profits at a time when consumers are facing rising auto insurance costs.
“It’s time for the Legislature to stand up to these unjustifiably high car insurance rates,” Irwin said.
SB 328 is co-sponsored by eight other Senate Democrats and one Republican. The bill has been assigned to the Committee on Finance, Insurance, and Consumer Protection, but has not yet received a hearing.
The APCIA cautioned that the bill would reverse the state’s progress in lowering auto insurance costs. The trade group cited a recent AM Best study showing that, between 2019 and 2022, average personal auto insurance premiums in Michigan fell by 12%, while nationwide premiums rose by 5%.
“The bill will raise costs for Michigan drivers and hurt working families,” said Roth. “The 2019 reforms helped Michiganders by lowering claims costs and bringing insurers back into the market, providing consumers with more choices. SB 328 will destabilize the market and harm drivers.”
