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Michigan's No-Fault Law under attack

SB 293 and SB 294: Insurance lawyer says insurance companies are promising “lower rates” while making record profits – and robbing Michigan drivers of important No-Fault benefits after a car accident

I’ve been a staunch defender of the Michigan No-Fault insurance system for my entire legal career. It is quite simply one of the very best things that we have in our state.

Insurance industry experts in Michigan and elsewhere in the country agree with me. Just look at their comments about Michigan’s No-Fault insurance, especially about the unlimited lifetime benefits that No-Fault guarantees for auto accident victims:

o “The benefits policyholders receive under the No-Fault policy in Michigan far outpace benefits available in any other state. Michigan is the only state that mandates insurance companies provide unlimited, lifetime medical benefits to motorists injured in auto accidents.
– Insurance Institute of Michigan press release, 12/21/2010, quoting Executive Director Pete Kuhnmuench

o “Michigan is fortunate to have a healthy auto insurance market where competition, safer cars and company fraud fighting efforts have resulted in lower costs for policyholders…”
– Insurance Institute of Michigan press release, 12/21/2010, quoting Executive Director Pete Kuhnmuench

o “… Michigan policyholders have the Cadillac of auto insurance policies.”
– Insurance Institute of Michigan press release, 12/21/2010, quoting Executive Director Pete Kuhnmuench

o Michigan No-Fault provides “the best auto insurance coverage in the country.”
– Pete Kuhnmuench, Executive Director of the Insurance Institute of Michigan

o Michigan No-Fault policyholders are “getting a bang for their buck when it comes to protecting themselves in the case of a traffic crash.”
– Pete Kuhnmuench, Executive Director of the Insurance Institute of Michigan

o Michigan’s No-Fault personal protection insurance (No-Fault PIP) is “the most efficient and effective auto insurance law in the United States.”
– Insurance Institute of Michigan, which is an insurance trade organization whose members provide auto insurance to 75 percent of Michigan’s market

o The Michigan No-Fault law “offer[s] the best No-Fault medical benefits of any state.”
– Insurance Institute of Michigan

o “The No-Fault concept has worked well.”
– Insurance Institute of Michigan

o Michigan’s No-Fault system “is cost effectively providing the nation’s most extensive auto insurance benefits at affordable rates …”
– American Insurance Association

o “Given that Michigan’s No-Fault injury benefits package is unlimited, the average price paid by drivers in the state is extremely reasonable.”
– Insurance Journal

But despite the generosity and value of our No-Fault system, as attested to by the insurance industry leaders quoted above, Michigan’s No-Fault system is also something that most Michiganders know nothing about, until after they’ve been seriously injured in a car accident. This lack of understanding of how incredibly valuable the No-Fault benefits we are all afforded under the No-Fault law make it very vulnerable to attack — especially when the attack is couched in terms like “lowering costs for auto insurance.”

Michigan senate bills aiming to strip away our No-Fault rights – SB 203 and SB 294

The attack on Michigan’s first-party No-Fault system (meaning the part that provides auto accident victims with invaluable No-Fault benefits) began last week, on March 24, 2011, with a series of bills aimed at stripping away the most important protections our No-Fault law provides.

Lifetime medical care? Gone. Protection for catastrophic injuries like traumatic brain injury and spinal cord injuries? Gone — with the costs transferred from auto insurance companies to the taxpayers and Medicare. There would also be arbitrary limits on the personal attendant care needs of our most vulnerable, as well as fee schedules for doctors.

o SB 0293 would effectively destroy Michigan’s first-party No-Fault system by limiting the cost of medical care and treatment to the catastrophically injured to a series of woefully inadequate dollar limits, the lowest dollar limit being only $50,000.

o SB 0294 would arbitrarily cap Michigan attendant care benefits, both by hours and dollar value of services rendered to quadriplegics, the profoundly brain damaged, and others in need of attendant care protection. This is regardless of what a seriously injured Michigan auto accident victim’s doctor or surgeon prescribes.

o There are number of other bills introduced at the same time that together include just about all of the auto insurance companies’ wish lists for boosting their profits at the expense of the welfare of injured auto accident victims in Michigan.

Michigan’s auto insurance companies already make record-breaking profits

These bills are being introduced under the guise of saving Michiganders money by lowering the cost of No-Fault insurance. But if state politicians really wanted to save Michigan residents money on their No-Fault policies, there are better ways to do it.

In 2008, the independent Angoff Commission found that Michigan auto insurance companies lead the nation in profitability. If politicians truly aim to lower the cost of auto insurance in Michigan, why not regulate the amount of profits that automobile insurance companies make? It certainly is odd that we’re required by law to purchase No-Fault coverage, but the amount insurance companies charge us cannot be regulated. Instead of stripping away important protections — the nation’s very best insurance system — why not empower the Michigan Insurance Commissioner to regulate the amount of profits that auto insurance companies can make here? After all, insurance commissioners have this power in nearly every other state in America, except Michigan.

Steve Gursten is recognized as one of the nation’s top insurance lawyers handling serious auto accident lawsuits, and No-Fault litigation. He routinely writes about insurance company abuse and the No-Fault laws in Michigan, and is available for comment.

Related information:

Michigan’s 10 worst auto insurance companies

Your Michigan No-Fault benefits and your rights

Dealing with car insurance companies in Michigan

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you. Call (800) 777-0028 for a free consultation with one of our No-Fault insurance lawyers.

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