Insurance companies keep their undefeated streak alive in MI Supreme Court

The rightwing Michigan Supreme Court struck a blow for justice for the downtrodden insurance companies and their record profits against the powerful poor and middle class consumers on Thursday when it ruled on a split 4-3 vote that insurers can continue to consider customers' credit scores when setting rates for auto and homeowners insurance.

In Insurance Institute of Michigan vs. Insurance Commissioner, the Republican majority on the court held that then-Office of Financial and Insurance Services Commissioner Linda Watters exceeded her authority under the insurance code to ban credit scoring through rules she issued in 2004. The “Gang of Four” helped insurance companies keep their undefeated streak alive, and insurance companies have not lost a case in the Michigan Supreme Court in 12 years.

There is no better reason to unseat Justice “Sleepy” Bob Young this November so people can get justice. It’s amazing that Young didn’t recluse himself from the case. He was the head attorney for AAA insurance for many years.

“This is a discriminatory decision by Bob Young and his Republican cronies on the Michigan Supreme Court,” said Mark Brewer, Chair of the Michigan Democratic Party. “This decision will increase premiums for drivers and drive up the cost of auto insurance coverage. Once again, Young and Republicans on the Court side with their campaign donors - the insurance companies - over Michigan consumers.”

I have no idea how your credit score, as well as your education level, zip code and even job title, determines what kind of driver you will be. Your rate should be based on your driving record and the value of your car.

The Republican’s had to twist themselves into a pretzel to please their moneyed donors to justify this discriminatory decision.

According to subscription only Gogwer, Justice Maura Corrigan, writing for the majority that included Stephen Markman, Elizabeth Weaver and Young, said “offering a discount for a good credit score is no different than one for safety devices in a vehicle.”

"Discounts for anti-lock brakes are offered because they reduce the risk of loss, and discounts for high insurance scores are offered because they reduce the risk of loss," she wrote. "The more insureds there are with anti-lock brakes, the lower the risk of overall loss. Likewise, the more insureds there are with high insurance scores, the lower the risk of overall loss."

Say what? A high credit score is the same as anti-lock breaks? That will be good to know when someone with a high credit score is speeding through a residential area and slams on the breaks to avoid hitting a kid who ran into the street.

Once again, the Republican majority on the court stiffed the consumers in favor of their insurance company masters.

People’s hearing on unfair credit scoring practices set

Michigan consumers tired of paying the 12th highest auto insurances rates in the nation will convene in Lansing on Wednesday for a people’s hearing on unfair credit scoring practices.

Insurance companies base the rates they charge for auto insurance on factors that have nothing to do with their driving record or the value of their car. Insurance companies can set rates based on education level, credit score, zip code and even job title.

Rates should determined by a person’s driving record and the value of their car, but the Senate Economic Development Committee refuses to take up bills correcting that wrong that will lower rates for Michigan consumers. So the people will hold a hearing at 1 p.m. Wednesday, June 16 in the Mackinac Room of the House Office Building, 124 N. Capitol in downtown Lansing.

The day will start with a march to the HOB beginning at noon from the steps of the Hall of Justice, 925 West Ottawa.

In addition to Melvin “Butch" Hollowell, the Michigan Automobile and Home Insurance Consumer Advocate, the panel will consist of Eleanor Josaitis, Co-Founder of Focus: HOPE; Dr. Oscar King III, President, Council of Baptist Pastors of Detroit & Vicinity, Inc.; Michael Dabbs, President, Brain Injury Association; and Linda Teeter, Executive Director, Michigan Citizen Action.

The event is sponsored by Michigan Citizen Action, America Votes, Michigan State AFL-CIO, Coalition Protecting Auto No-Fault, Council of Baptist Pastors of Detroit and Vicinity, Inc. and American Federation of State, County and Municipal Employees (AFSCME).

There is limited transportation available to and from Lansing. Call Sen. Hansen Clarke‘s, D-Detroit, off ice at (877) 252-7537 or the Automobile and Home Insurance Consumer Advocate at (313) 456-3535 for more information.

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.