After Local 4 pulled back the curtain on how some Michigan families’ car insurance claims are getting denied and their coverage canceled because they didn’t list their kids, who don’t drive, on their policy, Michigan lawmakers introduced a bill in response.
Last week, State Sen. Mallory McMorrow introduced Senate Bill 782.
The bill seeks to prohibit auto insurers from requiring people to list every family member and instead require them to list only people who drive.
“Kyla, this bill came out of your reporting, which led to constituents reaching out to our office, saying they did not know that this gap in the law existed,” McMorrow, who represents Oakland County and Northwest Detroit, said.
Insurance companies have used the vague language to deny claims for years, McMorrow said. McMorrow is also running for U.S. Senate.
“An insurer shall not deny coverage for a motor vehicle accident solely because a person was not listed on an insurance application as a relative domiciled in the same household as the person named in the policy,” the bill says.
The introduction comes because frustrated constituents reached out to McMorrow after seeing Local 4’s stories.
“You cannot lose your coverage if, let’s say, you didn’t list your six-month-old because your six-month-old is not about to take the wheel of your car,” McMorrow said.
The stories started with a tip to Local 4’s Kyla Russell about a Washtenaw County family whose GEICO policy was canceled because they didn’t list their three-month-old and toddler on the policy attestation form.
After that story aired, hundreds of messages from stunned families in similar situations poured in.
Local 4 interviewed several of those families, along with their attorneys. Some of them spoke to Local 4 again after the bill was introduced.
“It’s kind of like the David and Goliath type of thing,” Chris Camper, Owner and Lead Counsel of Camper & Associates, PLLC, said. “People feel so small and helpless, but, you know, they don’t just walk away and lay down for it.”
“Having minor children in the car, especially for collision claims, where the risk really doesn’t go up, for the collision portion of the claim, it could have a really big impact on those people,” Frances Murphy, a personal injury lawyer at Fran Murphy Law, said.
Both Camper and Murphey represent people who had claims denied or coverage lost.
Camper says their case was settled, and his client is very happy with the outcome.
Murphy says the claim has been amicably resolved.
For people like Katie Doherty, who was canceled out of the blue by GEICO and, in turn, has seen her premiums skyrocket at every insurance company because of the cancellation on her record, the change could have saved her hundreds of dollars.
“Do better,” Doherty said. “This was completely unnecessary. It didn’t save you any money, it didn’t save you any money, it didn’t do anything except cost me extra and add a lot of grief that was unnecessary.”
“If this sounds like something you need, contact your elected official,” McMorrow said. “Contact your state senator, contact your representative, and encourage them to pass this legislation.”
Local 4 reached out to several auto insurance providers in the state. Most directed them to reach out to the Insurance Alliance of Michigan. Local 4 reached out to the alliance, which released the following statement:
“Michigan’s auto insurance companies are there 24-7 to support Michigan families, especially when disaster strikes. To keep insurance affordable and accessible for all families, insurance companies rely upon accurate information from customers regarding their household members so they can offer consistent, fair pricing and key discounts. Without those important details, insurers may not be able to create appropriate coverage packages for individuals and families.
“Household size helps determine fair pricing, so if household information is missing or incorrect, households may be charged rates that don’t align with their coverage needs. This means larger households may pay less than their fair share, and smaller households may end up paying more to cover the risk created by larger households that do not accurately disclose key details about their family’s size.
“By transparently listing all household members, including children and non-drivers, the right people are matched with the right insurance product, and everyone pays a fair price based on accurate information.”
Erin McDonough, executive director of the Insurance Alliance of Michigan
For previous coverage on this issue, click here.