In 1973, when the first No Fault auto insurance law went into effect, promises were made to the public, by backers of the law. In exchange for giving up the right to sue, and giving up the option of having insurance, Consumers were promised efficiently processed claims, generous benefits, and reduced rates. However, rates have skyrocketed in Michigan to the point where consumers are paying a statewide average of $1067.00 just under New Jersey $1100.00 rate; the nations most expensive.  Simply put, auto insurance has become unaffordable for a significant and growing portion of our population, at the same time industry profits have skyrocketed to their highest levels in U.S. history, even factoring in the losses from September 11, 2001, and Hurricane "Katrina" in 2005.  Moreover, these rising profits have grown proportionally with a 30-year expansion industry de-regulation.  Today, Michigan has the weakest laws in America for regulating the insurance industry.

Michigan has among the highest rates for auto insurance in the nation.

Michigan Insurance Premiums up 69%

[Source: 2007 National Association of Insurance Commissioners: 2004/2005 Auto Insurance Date Report]

Insurance Industry Profits

In 1978 the Michigan Supreme Court, in the case Shavers v. Attorney General, ruled that No Fault was unconstitutional because there was no definition in the law clearly defining "affordability" for the Consumer. Because Consumers are required to buy insurance under No Fault, the Supreme Court ruled that Consumers must be protected with rates that are "fair and equitable." Otherwise, the law violates the Due Process clauses of the federal and state constitutions. The Supreme Court gave the state legislature 18 months to fix the deficiency. In response to the Supreme Court's order, in 1979 the state legislature passed a revision to the state Insurance Code, called the Essential Insurance Act. But instead of defining affordability from the Consumer's point of view, the legislature turned the Supreme Court's ruling on its head, and defined affordability from the insurance industry's point of view.

The Insurance Code definition provides that as long as insurance companies can show that "reasonable competition" exists between them, rates are affordable. Nowhere in the definition is there anything about what is "fair and equitable" to the Consumer. There is nothing in the definition which takes into account the Consumer's ability to pay. This is not what was promised to Consumers during the No Fault debate. And it is not consistent with the Michigan Supreme Court's order.

Listed below are the definitions. Judge for yourself.

"to be able to bear the cost of"

Supreme Court Definition