News

FOR IMMEDIATE RELEASE
Monday, June 13, 2005 Contact: Dan Farough
Phone: (517) 373-2093

LANSING - State Reps LaMar Lemmons III (D-Detroit), Marsha Cheeks (D-Detroit) and Gabe Leland (D-Detroit) applauded a plan Governor Jennifer M. Granholm introduced today that will lower insurance rates for good drivers and responsible homeowners in Detroit and Flint.

"We have been battling insurance companies for years on their unfair practices of redlining and insurance credit scoring," Lemmons said. "Residents in our urban cities are unfairly charged higher rates because of their zip codes. This program will help ensure that residents have the chance to buy quality and affordable insurance no matter where they live."

Gov. Granholm, Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters and other officials will help community groups, churches and neighborhood organizations create groups of potential customers with good insurance claims history. These groups would then negotiate directly with insurance companies for lower rates. Groups made up of low-risk drivers and responsible home owners generally receive lower rates.

"This program is a win-win for consumers and insurance companies," Cheeks said. "The consumer will receive lower rates and insurance companies will have a large group of responsible drivers and homeowners who file fewer claims."

Michigan law allows insurers to write auto and home insurance for specific groups of policyholders at rates that are lower than what they charge to individual policyholders. Group rates are typically lower because it is less expensive to market insurance to an entire group than it is to seek out individuals. Rates can also be significantly lower for groups who are expected to file fewer and/or less expensive claims.

"This program is a great opportunity," Leland said. "People should be given a fair rate for auto and home insurance and this program will help ensure that will happen."

For more information, go to the Office of Community and Faith-Based Initiatives Web site at www.michigan.gov/outreach .