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Steve Gursten in Detroit Free Press: It’s insurance company profits, not medical claims, driving up the cost of auto insurance

Even as the insurance industry pushes  for no fault “reform,”  insurance companies collect over $2 billion more in auto premiums in 2011 than they paid out in claims

Today, the Detroit Free Press ran my guest column:

Profits, not medical claims, drive up cost of auto insurance in Michigan

The  point  of my piece is that even as the powerful  insurance industry makes a hard push for no fault “reform” under the pretense that it will save drivers money, these companies are raking in exorbitant profits.  They are literally laughing all the way to the bank.

The insurance lobby insists that no-fault medical benefits must be capped.  They say it’s the cost of providing unlimited, necessary medical care to catastrophically injured auto accident victims in Michigan that is forcing them to continually raise rates.

For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.

Sadly, a number of lawmakers have bought the argument that no fault needs to be changed.  Even Gov. Snyder, the self-proclaimed “numbers man/nerd,” seems willing to accept this argument, without any facts, numbers, or even proof that change is needed.

There are other very prominent lawmakers, such as Oakland County Executive L. Brooks Patterson, who have been enormously frustrated by the total lack of transparency on this issue.

It is both sad and fascinating to watch, as so many of our lawmakers seem willing to make huge changes to our no fault insurance system, at the behest of the state’s powerful insurance industry lobbyists, without any of the facts and numbers to make educated decisions on whether reforming the no fault laws in Michigan are even necessary.

But new numbers from 2011 show the real reason insurance rates are so high in this state.  The real cause has far more to do with clearly excessive insurance company profit margins than anything else.

If these reform efforts pass, auto accident victims will pay a steep price, and already excessive insurance industry profit margins will become even fatter – by abusing Michigan drivers.  Capping no fault medical care and medical benefits to seriously injured auto accident victims will only force these people to turn to taxpayer-funded Medicaid.

I can think of about $2 billion things that are wrong with this picture.

For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.

Posted in: BLOG, Michigan No Fault Insurance, Michigan No Fault Law and tagged , , .

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