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Referendum Proposed To Lower Michigan Car Insurance Rates

A referendum supporting drastic cuts to car insurance rates in Michigan has taken another step towards becoming law, as its language was recently approved by the Michigan Board of Canvassers. This approval means the referendum will be sent up to the petitioning stage. The ballot initiative will need 304,000 voter signatures to go up for a statewide vote. If this occurs, experts on both sides of the issue feel that it will be a difficult fight for insurance companies who oppose the 20 percent cuts in Michigan car insurance rates mandated by the bill.

Michigan's statewide average car insurance rate is about $1067 for the year – fairly high for the United States. The state places 14th among all of the states of the union. The 20 percent reduction for all Michigan drivers will be in addition to a separate 20 percent discount for drivers that keep a clean driving record for six years or more. The bill would also prevent car insurance companies from unfairly canceling coverage, according to the language approved by the Michigan Board of Canvassers. It is unclear, however, what could be considered unfair coverage cancellation. Supporters hope that new insurance laws in Michigan could provide some relief from the struggling economy, which has hit automotive cities like Detroit exceptionally hard. They hope that decreased Michigan car insurance rates might also decrease the percentage of uninsured drivers in the state. Proponents believe that if the bill becomes law, it will stimulate insurance competition, leading to a better overall market for consumers.

However, insurance companies oppose the bill, claiming that the mandated 20 percent decrease would inhibit insurers' ability to run their businesses successfully. They argue that the decrease could actually lead to a loss of competition and worse general coverage for drivers, as insurance companies will have to cut some coverage to make up for the costs imposed on them by the law. The bill could also cause serious operation issues for any insurers working within Michigan, eventually (and unfairly) forcing some out of business. Some insurance company spokespeople have called for more realistic compromises to reform Michigan car insurance – compromises that would cut costs for insurers, as well as rates, and allow benefits for both drivers and the car insurance companies.

If the bill goes to a statewide vote, though, it's unlikely that insurance companies could dissuade voters from voting it into law. Any decrease in monthly bills, such as car insurance, tends to be enormously popular regardless of their implications. If the required signatures are collected, car insurance companies in Michigan are likely to go as far as they can to oppose a fairly enormous decrease in car insurance rates.

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