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Fraud by insurance companies will go unpunished under No Fault changes

Remember this when you receive your deceitful junk mailing from the auto insurance industry on No Fault “reform”

auto insurance company fraud under no fault reform

If you haven’t received a mailing from the insurance industry touting the need for No Fault “reform,” be on the lookout – and beware.

Our lawyers are reviewing arguments in this propaganda mailing, which are either completely untrue or intentionally misleading, in a series of blog posts called 7 reasons why this auto No Fault “reform” junk mail is trash.

First, did you know that today, in Michigan, an insurance company claims adjuster can lie to its own insured customer about what No Fault benefits they are entitled to under Michigan law, and both the claims adjuster and the insurance company can get away with it?

But let’s not look at the bad acts and clear fraud committed on a daily basis by the insurance industry. After all, the insurance companies won’t.  The auto insurance companies only want to look at and have unfettered authority to investigate alleged fraud by others. And that is what the auto insurance industry is pushing hard in its latest propaganda mass mailing.

According to its mailings,  the auto insurance industry’s plan is to:

“Establish a new auto insurance fraud unit to root out fraud, which may drive insurance prices up by as much as 10%.”

This 10% statistic, not surprisingly, appears to be made up of thin air by the lobbyists and marketers who wrote the mass mailing.  There is no independent verification or substantiation of this 10% number that the insurance industry uses.

What the propaganda mass mailings fail to clarify is that the only “fraud” that Michigan’s auto insurance industry is concerned with is fraud allegedly committed by auto accident victims.

In other words, the fraud committed regularly by auto insurers against their insured customers and auto accident victims will be allowed to continue to go unpunished and unchecked.

As such, auto insurers can with impunity continue to engage in fraudulent activities that include but are not limited to:

Any real common-sense plan for No Fault insurance reform must include the creation of a truly independent fraud unit entrusted with the legal authority  to investigate and appropriately punish auto insurer fraud as well as consumer fraud.

But the insurance industry wouldn’t want that, would it?

Yesterday, we discussed the ways Michigan auto insurance companies have failed to use the cost controls built into our No Fault law to control prices. Tomorrow, our lawyers will show you how No Fault “reform will most definitely not make auto insurance more affordable.

Related information:

How auto insurance companies helped create the PIP fraud problem in Michigan.

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Blog Author Steven M. Gursten
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