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Michigan No-Fault insurance "reform" isn't what's needed to save drivers money

According to insurance industry, our No-Fault insurance system is generating savings with lowered premium rates

The lobbyists for the Michigan auto insurance industry are saying that “reform” is the only way of “reforming” Michigan’s No-Fault insurance system. In other words, that changing the nation’s best auto insurance system is the only way to save Michigan drivers money on their auto insurance. Others, such as Detroit representative Virgil Smith, are willing to sacrifice the critical protections of Detroit car accident victims so he can say he saved them a few bucks as well.

I worry that this one-two punch at a time when the Republicans control all three branches of government will prove fatal to Michigan’s No-Fault insurance system as we now know it.

However, as a No-Fault insurance lawyer who has spent nearly 20 years, six days a week, battling insurance abuse and who is intimately familiar with our our insurance system, I like to point out the fact that Michigan’s auto insurance industry has spent the last several years (before they smelled blood with the current political status quo) praising the state’s existing system for its success in lowering auto insurance rates and saving drivers money, while providing Michigan drivers with protections and insurance benefits found nowhere else in the nation.

These protections and benefits become invaluable when someone is seriously injured in a car accident. And they have provided higher quality medical care for victims of traumatic brain injury, serious back injury and spinal cord injury in Michigan than in any other state.

The Insurance Institute of Michigan, which is an insurance trade organization whose members provide auto insurance to 75 percent of Michigan’s market, has proudly noted (in the past) the following:

o “Michigan’s average auto insurance premiums declined 9 percent from 2004 to 2008 …”

o “Auto insurance bills paid by Michigan motorists went down slightly in 2007 … Average auto insurance premiums in Michigan have declined for three straight years, dropping 3 percent from 2004-2007 …”

o “Michigan’s average auto insurance premiums decreased in 2006, compared to 2005 … For the two-year period 2004-06, Michigan average premiums declined 6 percent.”

o “A study of rates filed by the top 10 insurance companies with the state show that auto insurance rates dropped an average of 2 percent [in 2007] …”

o “In 2006, auto rates dropped 2 percent.”

Similarly, the Insurance Institute of Michigan’s executive director Pete Kuhnmuench has credited Michigan’s auto insurance market delivering “lower costs for Michigan drivers” and “savings for policyholders.”

Even national auto insurance industry leaders have chimed in, touting the drop in auto insurance premium rates that Michigan’s existing No-Fault system has been able to produce.

“Trends show that Michigan premiums are not spiraling out of control,” noted the American Insurance Association in 2009, pointing out that “the average Michigan premium … showed a decline of 6 percent since 2004, and is at its lowest level since 2002.”

Why Michigan insurance premium rates are dropping

Significantly, both the IIM and the IIM’s Kuhnmuench agree about the reason that premium rates for Michigan No-Fault insurance have declined under Michigan’s existing No-Fault System:

o “Recent profitability has enabled companies to decrease auto insurance premiums over the past several years.”

o “Insurance companies are profitable which allows them to reduce premiums …”

Makes you want to shout: “Hey you people controlling our auto insurance industry, we see right through you!” Of course, until the newspapers decide to publicize this (and with both of the latest incarnations of Detroit’s Free Press and News now solidly conservative Republican as well, this may take a while), we know the real reason you want to dismantle Michigan’s No-Fault system is to further boost your already record-breaking profits at the expense of Michigan’s drivers and seriously injured auto accident victims.

Steven M. Gursten is head of Michigan Auto Law. He is recognized as one of the nation’s top insurance attorneys helping people injured in serious auto accident cases and devotes the majority of his practice to catastrophic No-Fault insurance litigation.

– This blog was written by Steven Gursten and Todd Berg, esq.

– Photo courtesy of Creative Commons, by Cheeszy

Additional resources to protect yourself:

Injured Michigan auto accident victims can’t afford No-Fault “reform”

Top 6 worst auto insurance companies – 2011

What are my Michigan No-Fault insurance benefits?

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident, motorcycle accident and No-Fault insurance lawsuits 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 insurance attorneys. We are here to help you.

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