Gilchrist, Chatfield to work with Duggan on auto insurance reform

Mayor Mike Duggan’s call Tuesday night for the state Legislature to act on auto insurance reform wasn’t new — but he did have a powerful bipartisan fan club in attendance.

Lt. Gov. Garlin Gilchrist, a Democrat, and state House Speaker Lee Chatfield (R-Levering) sat together at his State of the City speech at Detroit’s East English Village Preparatory High School.

“I think that we are going to get it done this year,” Duggan said of overhauling auto insurance.

After the address, Gilchrist, who’s from Detroit, said, “We’re looking forward to working on the issue.”

Earlier that day, Chatfield had criticized Gilchrist’s boss, Gov. Gretchen Whitmer, for not addressing in her first state budget presentation the need to tackle the state’s no-fault system. That’s one of legislative Republicans’ top priorities this term and the speaker complimented Duggan for stressing the issue.

“I concur with the mayor,” Chatfield said. “I think it’s the single largest issue that is facing the people in our state and saddling our residents with burdening costs. I hope to partner with him and mayors across the state to make ensure that we reduce our auto insurance rates to save people across our state money.”

One idea floating around Lansing is a “grand bargain” in the fiscal 2020 budget. The idea is that Whitmer, who has proposed a 45-cent gas tax hike, would be able to check off her key campaign pledge of “fixing the damn roads.” In exchange, Republicans would get their top concern of auto insurance reform addressed.

The moving parts of such a deal, range of interest groups involved and the Sept. 30 budget deadline all make that prospect challenging.

Detroit motorists pay some of the highest premiums in the nation. Duggan said he believes his effort to achieve auto insurance reform will be ultimately be successful.

Michigan’s auto no-fault law currently covers a lifetime of unlimited medical care in catastrophic events. Efforts to change the system have failed in Lansing for decades.

Duggan and former state House Speaker Tom Leonard (R-DeWitt) teamed up on a 2017 plan that failed on a floor vote. As the Advance reported last December, a last-minute Lame Duck effort spearheaded by Quicken Loans founder Dan Gilbert also fizzled.

However, Republicans vowed to bring legislation back this term. House Republicans formed a special panel to handle the issue, the House Select Committee on Reducing Car Insurance Rates, chaired by state Rep. Jason Wentworth (R-Clare).

SB 001, sponsored by state Sen. Aric Nesbitt (R-Lawton) is the Senate’s No. 1 priority.

Duggan testified on the cost of auto insurance before the Senate Insurance and Banking Committee on Feb. 13.

“Michiganders have made it crystal clear — they want this problem solved,” Nesbitt said in January about his bill. “Michigan is the most expensive state in the country to purchase auto insurance, and people are understandably upset. We have an obligation to solve this problem.”

Efforts to kill or water-down no-fault have long been opposed by hospitals and doctors.

“Each day, brain injury providers see first-hand how no-fault protections save lives,” Tim Hoste, president of the Michigan Brain Injury Provider Council, said in January. “Eliminating these protections would be devastating to thousands of Michigan families, many of whom would be forced into medical bankruptcy and have no choice but to put their loved ones into state-funded nursing homes ill-equipped to handle their needs.”

Duggan and eight other plaintiffs filed a lawsuit in federal court last August against the state insurance commissioner challenging the constitutionality of no-fault auto insurance.

He wants U.S. District Court Judge George Caram Steeh to overturn the 1972 no-fault auto insurance statute and order the Legislature and Whitmer to “fix” the law within six months. The lawsuit cites a 1978 Michigan Supreme Court ruling in Shavers v. Kelley that said insurance rates have to be “equitable” and can’t be “unfairly discriminatory.”

“I don’t file suits that I don’t expect to win,” Duggan said on Tuesday. “So at the first court hearing three weeks ago, Judge Steeh didn’t decide the case, but he did say that Michigan’s no-fault law is shameful and the Legislature ought to act.

“Now being ruled shameful is not the same as being ruled unconstitutional,” he added, “but it’s a pretty good start.”