Petition drive to put the Fair Affordable Insurance Act on the November 2010 ballot is underway

The petition drive to put the Fair Affordable Insurance Act on the November 2010 ballot is officially underway, spearheaded by Sen. Hansen Clarke, D-Detroit.

Fair Affordable Insurance Rates (FAIR) has to collect 304,000 signatures in the next 180 days to place it on the November ballot, and they plan to collect 400,000 by the end of April.

The ballot question came about because the Michigan Senate refused to pass real auto insurance reform and in October rejected a 12-year effort in to do away with redlining.

Consumers in Michigan pay the 12th highest auto insurances rates in the nation, but the problem in Detroit is even more acute. Drivers in Detroit pay an average of more than $5,000 a year, yet the national average annual car insurance rate is only $949.

“We’re trying to lower expenses for people to free up money so they can spend it on their mortgage, credit card debt or their children,” Clarke said.

The law, if approved by voters, would cut auto, home and business insurance premiums by 20 percent, cut premiums by 20 percent for safe drivers, reimburse consumers when insures overcharge them, mandate insurers follow consumer protection laws, prohibit insurers from unfairly canceling coverage and protect consumers from predatory insurance practices. More importantly, it will base insurance premiums on your driving record, not on education level, credit score, zip code or even job title.

“We believe this is a good policy,” Clarke said. “This is the largest tax break you can give a business.”

The petition is two pages that fold out because of the complex legal language, but Clarke said it is airtight and the law has worked elsewhere.

“It has lowered premiums in California,” he said. “We have learned from past court cases, and the language is better.”

A June 2007 study concluded that Michigan auto insurance companies have been gouging consumer while hoarding record-breaking profits for years.

A study released in 2007 concluded that Michigan auto insurance companies have been piling up big profits and excessive surplus funds, reaching record levels in 2006. The report was authored by Jay Angoff, an independent and highly respected auditor who served as Missouri's insurance commissioner from 1993-98. He said AAA's – the largest provider in Michigan - profit more than doubled to $104.2 million in 2006 from $50.9 million in 2002. The report concludes that all three Michigan auto no-fault insurance companies are making excessive profits.

“This (proposal) is not anti-insurance,” Clarke said. “We want them to make a profit, but we want them to give back some of their windfall profit.”

State law says the petition language is good for 180 days, and there can be no more than 90 days between the first and last signature.