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Auto insurance reform failed this time, but the debate is still far from over

car accident
Daniel X. O'Neil
Flickr - http://j.mp/1SPGCl0

Mike Duggan is the most powerful mayor of Detroit in many years, and probably the most popular one statewide in our lifetimes. Republicans, on the other hand, have overwhelming control of the state Legislature.

Jack Lessenberry

You’d think, then, that if the Democratic mayor of Detroit were to team up with the Republican Speaker of the House, you would have an unstoppable coalition of immense power.

You’d think that, but you’d be wrong.

After both men worked their respective constituencies for weeks, the State House of Representatives held a vote on an auto insurance reform bill that both Duggan and Speaker Tom Leonard desperately wanted.

The bill was designed to give people options for drastically lowered car insurance rates, especially in Detroit, where rates are the highest in the nation, and many people can’t afford and do not have coverage of any kind.

But not only was the reform bill defeated, it wasn’t even close. The vote was 63 to 45. Despite his charm, clout and political skills, Duggan could only deliver the votes of four of the 44 House Democrats, all Detroiters.

Afterwards, both Duggan and Leonard blamed special interests.

According to MIRS, the Michigan Information and Research Service, Leonard said “Today, House Republicans stood up for the state to lower auto insurance rates and the Democrats decided to side with the hospitals and trial attorneys over the people.”

For his part, Duggan said Detroit representatives who voted no would have to answer to their constituents, but said he intended to rally the business community and come back with “a new strategy and new approach.”

I fully expect there will indeed be another attempt. Even had this passed the House, it might have been an exercise in futility, since Senate Majority Leader Arlan Meekhof had said he regarded it as an illegal price-fixing bill which would never see the light of day in his chamber.

The situation is much more complex than either man portrayed it.

But in fact, the situation is much more complex than either man portrayed it.

(Read more: You may have seen ads about the no-fault auto insurance system. Here's why.)

Detroit indeed has a real auto insurance crisis. The cost of insuring a car is so huge that many residents buy only a one-week policy once every year when they have to renew their license plates.

Worse, the cost drives people out of the city and prevents other desperately needed new residents from moving in. But it’s not clear that the bill the House rejected would have solved the problem. It was complex and constantly being modified, right up to the vote.

Stephanie Chang, a Detroit representative who voted no, said that her constituents who couldn’t afford auto insurance now, still wouldn’t be able to afford it under the Duggan-Leonard bill. She agreed auto insurance needs reforming, but thought this wasn’t the way.

My guess is that she is basically right.

There’s another huge problem, too. Michigan does have one big auto insurance positive; a huge fund providing unlimited coverage for the victims of truly catastrophic car accidents. Mayor Duggan is willing to allow motorists to trade this guarantee for lower car insurance rates. But what would happen when some of those folks end up catastrophically injured, as certainly would happen?

Nobody has addressed that. The car insurance crisis is a problem that needs a statewide, possibly even a national solution. Let’s hope our leaders don’t stop trying.

Jack Lessenberry is Michigan Radio’s Senior Political Analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

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