Detroit will be the test for less expensive – but unsafe and inadequate – No-Fault insurance, says Michigan insurance lawyer
The Detroit Free Press reported on June 6, 2011 that Detroit could become a test for a much less expensive, bare-bones form of new No-Fault auto insurance. The plan is sponsored by State Sen. Virgil Smith. Sadly, the new plan Virgil Smith is considering is terrible for Detroit residents injured in auto accidents.
Virgil Smith’s plan would devastate the legal rights of Detroiters seriously injured in auto accidents. It takes the worst of Michigan’s No-Fault insurance benefits (also called first-party or PIP benefits) and third-party pain and suffering benefits, and lops off accident victims’ ability to purchase currently optional uninsured and underinsured motorist coverage. In other words, the “basic” No-Fault that Smith envisions is so ridiculously low, it would be wiped out before someone leaves the emergency room if they’ve suffered serious personal injury from an auto accident.
In turn, the costs for the injured driver would be shifted to Medicaid, and the burden of medical care shifted to the public taxpayers. Also, as the government through Medicaid and Medicare would presumably have a lien on the amount of medical care it has paid, injured accident victims would then get nothing for their injuries and pain and suffering in their lawsuit against the at-fault driver. As I said, Smith’s plan takes the worst of both worlds.
Ironically, none of this deters Virgil Smith. Consumer groups have been telling him for years that his No- Fault insurance proposals are terrible for Detroit residents. Others, such as the Coalition Protecting Auto No-Fault and nearly every member of the Democratic Party in Detroit, have also told him his ideas are devastating for Detroit residents seriously injured in auto accidents. It seems the only people who really like this idea are the auto insurance companies.
Lowering auto premiums for Detroit residents is worthy goal, but can be done better
Smith says auto insurance premiums for Detroit residents must be lowered. I agree. But there are better and more effective ways of accomplishing this. Smith says he wants to take away important legal rights, such as life-time medical benefits, to lower the price of auto No-Fault insurance for City of Detroit residents.
But why is Smith not taking on the auto insurance companies? For example, even though Michigan’s auto insurance companies enjoy some of the highest profitability margins in the nation here, Michigan is one of the few states without an insurance commissioner that can regulate the amount of profits insurance companies can make – for a product that we as drivers are legally required to buy.
If Smith truly cared about Detroiters as he says he does, and wants to lower insurance rates as he says he does, wouldn’t this be a better way to lower premiums instead of crushing the legal rights of Detroiters?
And what about red-lining and credit scoring?
Since the only ones who seem to be supporting Smith in this effort to destroy the legal rights of Detroiters seriously injured in auto accidents is the Insurance Institute of Michigan, doesn’t it beg the question of who really is putting Virgil Smith up to this?
Here’s the full story in the Detroit Free Press: Cheaper auto insurance that limits injury coverage in the works
– Steven M. Gursten is head of Michigan Auto Law. He is recognized as one of the nation’s top insurance lawyers handling serious auto injury cases and No-Fault litigation. Michigan Auto Law has received the top jury verdict for a car accident or truck accident in 2008, 2009 and 2010, according to Michigan Lawyers Weekly.
Additional resources to protect yourself:
Show us the money from proposed changes to Michigan’s No-Fault law
Why Detroit papers are falling for the proposed elimination of Michigan No-Fault law
Michigan No-Fault insurance resource center
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 (248) 353-7575 for a free consultation with an insurance lawyer. We are here to help you.