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Insurance lawyer: More MCCA data needed before No-Fault price hike

Michigan Auto Law attorney interviewed by Michigan Lawyers Weekly on the MCCA fee increase, and a No-Fault insurance “reform” update from the trenches

A Michigan Auto Law attorney was interviewed by Michigan Lawyers Weekly about the Michigan Catastrophic Claims (MCCA) increase in its annual per-vehicle fee. On March 16, there was an increase of 21 percent, which is $145 per car to $175 per car. The question seems to be: is this MCCA fee spike politically motivated? As it is coming at the same time as the insurance industry is pushing HB 4936, and as the MCCA is comprised almost entirely of insurance industry higher-ups.

Our insurance lawyers have been writing in depth about this issue; and Michigan drivers’ need for more information from the insurance industry, given we’re all required by law to buy auto No-Fault insurance, yet Michigan insurance company profits are not regulated. Further, there are no bad faith/consumer protection laws to protect drivers from insurance company abuse. Here’s a recent blog post on the topic: More transparency needed in pricing of Michigan No-Fault auto insurance.

Currently, Michigan drivers are required to pay for auto insurance that provides lifetime coverage of medical care after car accidents. Auto accident claims that exceed $500,000 are paid by MCCA fund.

The Michigan Lawyers Weekly reporter, Carol Lundberg, wanted a No-Fault reform update, given that last year, House Bill 4936 was passed out of committee to the full House but was unable to garner enough votes for passage.

HB 4936 would allow insurance policyholders to opt for No-Fault coverage (also called personal protection insurance (PIP)) as low as $250,000, and would set an upper cap at $5 million. It also would have reduced payments to medical care providers to the next-highest fee schedule.

Here’s what Michigan Auto Law told Carol in the Michigan Lawyers Weekly story, “State rep presses for MCCA data, transparency”:

Claims data is necessary before lawmakers can consider caps: “The idea of caps or selling policies that offer a cap, that’s probably a dead issue”

And it wouldn’t be dead if lawmakers had the data from MCCA… Two traditionally Republican constituent groups — the insurance industry and medical care providers — had hoped that lawmakers might be able to negotiate to come up with a solution to what they call a problem, that lifetime PIP coverage is unsustainable, but it shouldn’t be saved at the expense of the medical community.

“The lifetime caps might have a chance, but if MCCA keeps its numbers secret, there’s no way of knowing how many people would wind up having inadequate coverage under a $5 million cap.”

The MCCA assessment hike and HB 4936 are two different issues. But if the insurance industry wants to raise prices, while aiming to cut our life-saving No-Fault PIP benefits, Michigan drivers need to know why.

Recently, CPAN, a coalition opposing Michigan No-Fault insurance “reform” has filed a lawsuit against the MCCA. CPAN is claiming the law that created the MCCA improperly left out information about how much it is paying out on catastrophic personal injury claims from auto accidents in Michigan.

Remember, Michigan auto insurance prices are among the highest in the entire nation. Michigan ranked third in the country for the highest priced auto insurance, according to Insure.com’s 2012 car insurance rate survey: “Car Insurance Rates By State: The most and least expensive places to buy auto insurance in 2012.

What we need to know about is more transparency in auto insurance, how the cost is determined, just how much money in profits the insurance industry is making in this state before they further hike prices, and what some of the highest profit margins in the entire nation means to Michigan drivers who bear the cost.

Related information:

How to be a smart shopper when buying Michigan No-Fault insurance

More on the 7 things to know about No-Fault “reform”

 

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