Lansing Reacts To Granholm's Insurance Proposal

Two of every ten Michigan drivers are behind the wheel without car insurance.

It's an issue Michigan has been dealing with for years, and while 20% may sound startling, Melvin Hollowell of the Insurance Consumer Advocacy Group said it's even higher in other places,"In some of our cities, the numbers are over 50%," Hollowell said. "This is a large indictment of the no-fault system and it tells us that there is a dysfunction going on, so people try to go around the system."

Going around the system, however, is one of the things Governor Granholm is trying to stop with a proposal made last night, "I call upon every auto insurance company to freeze rate increases for 12 months".

Hollowell said having more affordable rates would create more jobs for Michigan, "The company will actually be getting more premiums in their coffers and they'll be able to have more employees."

Hollowell is wrong, however, according to Tom Shields of the Michigan Insurance Coalition, "It doesn't make any sense. There's about 50 to 70 thousand people who currently work in the insurance business in the state, so you are putting those people's jobs in jeopardy and are putting them at a disadvantage to compete with other companies around the country."

The Michigan Insurance Coalition said they feel confident that the legislature will realize the implications of rate freezes, but Governor Granholm said she will do all she can to force those companies to comply.