HOUGHTON — Michigan ranks as the highest state for automobile insurance rates in the country, according to a University of Michigan study released in March 19, 2019. U-M’s Poverty Solutions found that the estimated annual premium of $2,610 is nearly double the national average. According to the report, the U.S. Treasury Department’s Federal Insurance Office deems auto insurance unaffordable in areas where premiums exceed 2% of a zip code’s median household income.

The U-M study also found that in 97% of Michigan’s zip codes, insurance premiums exceed the federal government’s definition of affordable. It also found that a larger proportion of residents, particularly in low-income communities, are forced to drive without insurance.

In Houghton County, for example, approximately 35% of the earning distribution is less than $10,000 annually, while approximately 4% earn over $20,000, according to Houghton County economic data on towncharts.com.

According to an Mlive report, as far back as 2011, legislative efforts to change the state’s auto insurance policy “previously failed to garner the necessary support. Legislative leaders committed to making an overhaul of the state’s auto insurance laws their top legislative priority of 2019.”

Eight years later, on May 24, 2019, the Detroit News reported that the reason legislature has been unable to reform the laws was because: “Past reform efforts had failed due to aggressive lobbying by the insurance industry, hospitals, trial attorneys and auto crash victims who have benefited from care under the existing law.”

The article stated that Michigan lawmakers approved a “sweeping plan to reform the state’s no-fault auto insurance system, signing off on a deal negotiated by Democratic Gov. Gretchen Whitmer and Republican legislative leaders designed to drive down sky-high rates.”

The News went on to say that Whitmer’s promised signature will end a decades-long stalemate over the 1973 auto insurance law.

The “historic” vote was a big win for “the 7 million drivers across the state of Michigan who have been asking us for years to step up and provide a real solution to our broken car insurance system,” said House Speaker Lee Chatfield, R-Levering, the article reported.

But were the 7 million Michigan drivers really the concern of legislators, or did their concerns rest on campaign contributions?

A week before the Detroit News published its article, the Michigan Campaign Finance Network released a report in which it stated that a collection of 18 different special interest groups, Super Political Action Committees (PACs), and nonprofits, spent at approximately $4.5 million to “support candidates who are serving in the legislature.”

Of the $4.5 million tracked over a five-year period ending in 2018, insurance company PACs and groups backing the new bills, or past proposals similar to them, have spent about $2.7 million to support current lawmakers. Groups opposing the bills have spent about $1.8 million.

Once again, the special interest group, Michigan Chamber of Commerce, was near the top of the pile, according to the MCFN. Of the 18 PACs examined for the report, two connected to the Michigan Chamber of Commerce were among the biggest spenders in support of current lawmakers.

The Michigan Chamber, which lobbies on a variety of issues, has spoken out in support of Senate Bill 1. Rich Studley, the chamber’s president and CEO, called it “bold action to drive down Michigan’s highest-in-the-nation car insurance rates,” states the Detroit News.

According to the MCFN, two PACs connected to the influential business lobbying group Michigan Chamber of Commerce were among the largest donors to current lawmakers. The Chamber has spoken in favor of Republicans’ currently passed legislation.

Groups lobbying against that and similar legislation have included the Michigan Health and Hospital Association, as well as PACs tied to specific hospital systems like Spectrum Health and the Henry Ford Health System.

Michigan’s no-fault car insurance system requires all drivers to carry personal injury protection coverage, which helps cover medical expenses for the policyholder, family members and passengers in a car crash. Michigan guarantees unlimited, lifetime medical benefits to crash victims, which increases the risk for insurers and drives up premiums.