Gilbert creates auto insurance petition drive committee, releases poll

Lansing – Detroit businessman Dan Gilbert’s team on Thursday filed paperwork for a potential petition drive to reform the state’s no-fault auto insurance law and shared recent polling showing strong support for reforms to drive down rates that routinely rank among the highest in the nation.

The paperwork filing comes as Democratic Gov. Gretchen Whitmer and Republican legislative leaders continue to negotiate potential reforms and serves as a backup option should those talks fail, said Jared Fleisher, Gilbert’s point man point man and vice president of government affairs for Quicken Loans.

“We continue to state to any and everybody that will listen that we want there to be a legislative solution, but this is our fail-safe if there isn’t one,” Fleisher told The Detroit News.

Forming a state committee will allow Gilbert's group, called “Citizens for Lower Auto Insurance Rates,” to raise or spend money on a petition drive. Organizers have not yet filed any petition language with the state, a step that is required before circulation.

Most Michigan voters say the state’s auto insurance rates are too high and support giving motorists the option to buy policies with reduced medical coverage, according to a recent statewide poll conducted for Quicken Loans by the Glengariff Group Inc.

The survey of 600 likely voters was conducted March 29-April 1 but released to The Detroit News on Thursday amid ongoing negotiations between the Republican-led Legislature and Whitmer, a first-term Democrat who threatened to veto earlier proposals.

While public debate has ramped up over the past month, voter sentiment was already “pretty strong” at the time the survey was conducted, said pollster Richard Czuba. “I would not expect it to have shifted dramatically, particularly when you look through these numbers and see the intensity of them.”

More than 91% of respondents said Michigan rates are too high and 74.3% said premiums here are much more expensive than in other states.

Eighty-two percent voiced support for moving to an auto insurance system like other no-fault states that would allow drivers to choose their level of medical coverage, which would end M unique guarantee of uncapped lifetime coverage.

"I went into it expecting larger partisan splits, especially in this era of very divided government," Czuba said, noting similar results among voters who identify as Democrats and Republicans. "I was startled to see there are no partisan differences in these numbers."

Czuba, who also conducts polls for The Detroit News, said he only agreed to do the survey for Quicken Loans if the firm gave him free rein to dig into voter sentiments. He presented voters with common arguments for and against capped coverage options, which would be allowed under plans approved by the House and Senate that Whitmer has threatened to veto.

Respondents were told supporters of Michigan’s current no-fault system contend that drivers will automatically choose the cheapest level of coverage if allowed, and if they then get in a catastrophic crash, they would “run out of coverage and either receive inferior care or be forced to spend down all their savings.”

Live operators also told voters that reform proponents say 99% of accident claims cost under $250,000 and that choice would provide motorists significant savings. If their auto benefits ran out, they could turn to their health insurance, Medicare or Medicaid for coverage.

Presented with that information, more than 90% of voters said drivers should be able to choose their level of medical coverage, while 4% said they should be required to buy limited coverage and others were undecided. Democrats and Republicans had similar responses.

Arguments about potential bankruptcy for the families of injured motorists “does not move voters,” Czuba said. “The one takeaway I got out of this survey is, first and foremost, voters believe: Give us something, and give us the choice. They feel they are responsible for the choice.”

Voters were also asked whether it was more important for them to have a choice in their level of insurance to control their costs or that they have unlimited medical coverage in the event of a major accident. Again, 73.5% of voters said they’d rather have the choice to save on rates.

Respondents also expressed a strong interest in the Legislature taking action to reduce rates, ranking its importance as an 8.7 on a 10-point scale. But if lawmakers do not act, nearly 80 percent of voters said they would be willing to support a ballot proposal.

The poll has a margin of error of plus or minus four percentage points. Among respondents, 65% were contacted on land lines and 35% on cell phones.

Beyond reforms, more than 70% of voters said they would like to scrap the state’s no-fault auto system and replace it with the kind of at-fault system used in most other states. Nearly 89% said it is time to take a “fresh look” at the Michigan law.

“There’s no allegiance among Michigan voters for the no-fault system,” Czuba said. “Voters are angry over this. They want some sort of change.”

Separate proposals approved earlier this month by the GOP-led House and Senate would allow motorists to purchase plans with reduced medical coverage and set a fee schedule capping rates that medical providers can charge auto insurers.

Whitmer has said she would veto any plan that allows motorists to completely opt out of medical coverage if they already have health care plans. She’s also seeking stronger guarantees for consumer premium reductions and a prohibition on insurers using non-driving factors like ZIP codes to set rates.

The looming threat of a petition drive could pressure Whitmer into striking a deal with legislative leaders because the Michigan Constitution allows lawmakers to initiate legislation without the governor’s signature, meaning she could have no say in the revised law. 

But Whitmer said Wednesday she will not be “bullied” into striking a deal on auto insurance reforms, saying she knows that Gilbert is frustrated with “the lack of movement” on the issue but believes it is most important to “get this right.”

Gilbert said earlier this week he is not trying to back Whitmer or GOP leaders into a “corner” during their negotiations and noted his potential petition drive “wouldn’t need to start until this summer.”

Gilbert and his team have argued that high auto insurance rates are a major obstacle to economic growth in Detroit and other parts of the state.

Defenders say the state’s unique no-fault auto insurance system guarantees the best care in the country for injured motorists, who can quickly rack up massive bills and require lifetime medical assistance.

The Coalition to Protect Auto No-Fault on Thursday sounded the alarm over what they are calling an overlooked but “major issue” in the reform proposals approved by the House and Senate.

Both plans would apply proposed medical provider fee schedules and caps on in-home attendant care retroactively for auto crash victims already injured and receiving care, said personal injury attorney Steve Sinas. 

“This will have an immediate and disastrous effect on the catastrophically injured people already claiming benefits through the system,” he said in an analysis shared with The News. “Medical providers will be severely harmed financially.”

The retroactive care caps are also “fundamentally unfair” because injured motorists had purchased plans that were priced based on the assumption of current coverage guarantees, Sinas argued.

“This would be an obscene rip-off of insurance consumers and an unconscionable multi-million dollar windfall for the insurance industry,” he said.

The Insurance Alliance of Michigan, an industry group that supports medical fee schedules and attendant care limits, said that applying the changes to current and future claims would “rein in overcharging by big hospitals and maximize savings to drivers.”

“Some opponents of reform are trying to change this, which would allow the overcharging to continue and that would hurt consumers,” said IAM Executive Director Tricia Kinley.

joosting@detroitnews.com