Hardiman votes against a bill that would have increased insurance rates for local residents
Wednesday, October 28, 2009
LANSING—Sen. Bill Hardiman 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.
“I did not support this legislation because it would dramatically increase auto insurance rates for constituents in my district,” said Hardiman, R-Kentwood. “The unfortunate reality is that people are already struggling to make ends meet. Most could simply not afford to pay more for car 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.
Hardiman 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 Lowell would rise by 35 percent, while Grand Rapids rates would increase by 28 to 30 percent.
“I support change that provides more cost effective measures for all Michigan residents and I am committed to working toward that end,” Hardiman said. “Perhaps we should work on the reasons why the cost is higher in some areas as opposed to others, but not at the expense of all residents. We need to look at the reasons for the higher rates.”
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.
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