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Gov. Whitmer orders examination of Michigan auto insurance rates

Posted: 3:32 PM, May 01, 2019
Updated: 2019-05-02 08:57:39-04
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LANSING, Mich. (WXYZ) — Michigan Gov. Gretchen Whitmer has ordered the Department of Insurance and Financial Services to exam and create a report on Michigan auto insurance rates.

The examination, according to the governor's office, will focus on two aspects of auto insurance rates in the state: the use of non-driving factors to set rates and pricing of coordinated policies.

Michigan has the highest auto insurance rates in the country, and a study from the University of Michigan found that drivers pay nearly twice as much as drivers in other states for car insurance.

According to a release, insurers may, with some limitations, use the non-driving factors to determine rates. Those can include education, home ownership, occupation, credit scoring factors and in some cases, gender and marital status.

"Auto insurance rates must be fair and reasonable," Whitmer said in a release. "We must take a hard look at how auto insurers are setting rates to ensure these practices are lawful and to determine how we can achieve complete and lasting reform for Michiganers."

During the examination, DIFS will identify what non-driving factors they are using and how they're being applied, and then make recommendations for legislation or other rulemaking to make sure consumers are protected.

DIFS will also review "price optimization" techniques and examine how car insurance companies are determining whetehr coodrinated auto insurance policies have "appropriately reduced" premiums that are required under Michigan law.

The department will begin the examination right away and produce the report as soon as possible, Whitmer's office said.