During her state of the state, Governor Granholm requested that auto insurance companies freeze rates for a year.
TRAVERSE CITY -- Auto insurance was a hot topic during Governor Granholm's state of the state Tuesday night. She's requesting insurance companies freeze their rates for the next 12 months.
It's part of the governor's plan to strengthen the economy and ultimately help consumers when it comes to paying auto insurance.
"Do you think auto insurance right now in Michigan is too high?" asks 7&4 News.
"I do believe it's too high. I don't believe that it needs to go up anymore," says Traverse City resident Ashley Rittenhouse.
In a report released by Michigan's insurance advocate just a day after the governor's state of the state, the auto insurance industry raised rates 69% since 1991.
The report also includes recommendations to reform auto insurance including insurance companies submitting rates to the state for approval.
"I think part of it is redirick because again the insurance commissioner already has the authority to accept or reject the rates. So, indicating that insurance companies to submit, they already do. I don't see how this is going to effect the overall cost of insurance," says independent agent and owner of Fitzmaurice-Garvin Insurance, Trina Garvin.
Garvin says the governor's plan to reform auto insurance may benefit the economy but not necessarily drivers themselves.
"They're talking right now about going from unlimited medical which we have in the state of Michigan which is the biggest portion of the insurance policy that increases the cost of insurance...Selecting a different tier or a different or an amount that a policy is going to pay out is seriously detrimental to people involved in accidents," says Garvin.
Garvin says the governor's plan may also create some economic hardships for the insurance companies.
"A rate freeze would be detrimental in that if the cost of doing business continues to rise and my product pricing doesn't keep up with that, I as an employer may have to lay people off. If it gets really bad I may have to close my doors, we've been open since 1946," says Garvin.
According to the Insurance Institute of Michigan, as of 2006, Michigan has one of the highest auto insurance rates in the country along with 13 other states.
