Michigan Bill Aims to End Auto Insurance Denials Over Unlisted Family Members
Michigan lawmakers are taking action to address a frustrating issue for many drivers: auto insurance claim denials based on failing to list every member of their household on their policy, even those who don’t drive. This comes after an investigation by Local 4 highlighted the practice, prompting a legislative response.
The Problem: Non-Driving Family Members and Coverage
For years, some Michigan auto insurers have been denying claims or even canceling policies because policyholders didn’t list all household members, regardless of whether those individuals had a driver’s license. This often impacted families with young children, as illustrated by the case of a Washtenaw County family whose GEICO policy was canceled for not listing their three-month-old and toddler. Hundreds of similar stories quickly emerged after Local 4’s initial report.
Senate Bill 782: A Potential Solution
State Senator Mallory McMorrow (D-District 8) introduced Senate Bill 782 last week to address this issue. The bill specifically prohibits auto insurers from denying coverage solely because a person wasn’t listed on the insurance application as a relative living in the same household. The core principle, as McMorrow stated, is that a six-month-old isn’t likely to be behind the wheel.
The bill amends section 3114 of 1956 PA 218 (MCL 500.3114) to enact this change.
Industry Response and Concerns
The Insurance Alliance of Michigan argues that accurate household information is crucial for fair pricing and discounts. They claim that listing all household members allows insurers to offer consistent rates and that inaccurate information can lead to some households paying less than their fair share, while others pay more. They emphasize the importance of transparency in listing all residents.
Impact on Consumers: Real Stories
The current practice has left many consumers in difficult situations. Katie Doherty, for example, experienced a policy cancellation and subsequent premium increases at other companies due to this issue. Legal professionals like Chris Camper of Camper & Associates, PLLC, and Frances Murphy of Fran Murphy Law, have represented clients facing similar denials and are optimistic about the potential impact of the bill. While some cases have been settled amicably, the financial and emotional toll on families has been significant.
What’s Next?
Senate Bill 782 has been referred to the Committee on Finance, Insurance, and Consumer Protection. Senator McMorrow is encouraging constituents to contact their state senator and representative to voice their support for the legislation.
FAQ
Q: What does Senate Bill 782 do?
A: It prohibits auto insurers from denying coverage solely because a household member who doesn’t drive wasn’t listed on the policy.
Q: Who introduced the bill?
A: State Senator Mallory McMorrow.
Q: Why are insurance companies asking for information about all household members?
A: They claim it’s to ensure accurate pricing and fair discounts for all policyholders.
Q: Where can I find more information about this bill?
A: You can find the full text of the bill and its status at the Michigan Legislature website.
Pro Tip: Stay informed about legislation impacting your auto insurance by regularly checking the Michigan Legislature website and contacting your elected officials.
Did you know? This bill originated from investigative reporting by Local 4, demonstrating the power of media in driving legislative change.
Have you experienced a similar issue with your auto insurance? Share your story in the comments below!
