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The charade over “savings” from Michigan No-Fault “reform” has finally stopped

December 5, 2011 by Steven M. Gursten

Insurance attorney says that with no guaranteed savings from the insurance industry, there is absolutely no reason to support elimination of vital No-Fault medical benefits

Gone are the empty promises, suggestions, and innuendos that the changes to Michigan No-Fault will save Michigan drivers money on their auto insurance premiums.

In recent public statements, Michigan auto insurance industry leaders and lobbyists have failed to include the once-pervasive — albeit bewilderingly unsubstantiated — claim.

From the beginning of the so-called No-Fault “reform” movement in early 2011, the major selling point made by the insurance industry propaganda machine and lobbyists has been the vague “promise” that Michigan drivers will pay less for their car insurance if lawmakers are allowed to eliminate the No-Fault law’s (nearly 40-year-old guarantee) of unlimited medical benefits after injury from a serious car accident.

After all, saying that taking away important No-Fault protections from drivers to boost insurance industry profits in Michigan by over $100 million dollars a year – with no savings for ordinary drivers – probably wouldn’t go over very well.

But now the illusion of “savings” for Michigan drivers has been dropped from the so-called No-Fault “reform” talking points.

That can only mean one thing.

The lack of truth to the “savings” charade has become so patently obvious, “un-spinable” and undeniable that even the pitchmen for so-called No-Fault “reform” can no longer bring themselves to repeat it.

Savings, savings, savings on Michigan auto insurance

Selling the idea of so-called No-Fault “reform” — even the plan to eliminate No-Fault’s guarantee of lifetime reasonably necessary medical benefits — probably seemed pretty easy, initially.

The calculation is simple: want to pass legislation that hurts everyone? Just tell Michigan drivers, many of whom are struggling to make ends meet, that they will save money on auto insurance, and they will likely agree to whatever kind of “reform” the insurance industry is pushing. As such, the following catch-phrases were used to pitch so-called No Fault “reform”:

o “[S]ave money.”
o “Lower premiums.”
o “Lower what [drivers] pay for auto insurance.”
o Allow drivers “to buy … insurance … at the price they can afford.”

Savings charade from the Michigan auto insurance industry

The “savings” pitch has been a charade from day one. Not one of the three so-called No-Fault “reform” bill packages introduced in 2011 (Senate Bills 293-295, House Bill 4936 and Senate Bill 649) guarantees in writing that Michigan drivers will save money on their auto insurance if the Legislature is allowed to abolish the nearly 40-year-old guarantee of unlimited No-Fault medical benefits.

Naturally, all of the bills also fail to guarantee in writing precisely how much each Michigan driver would save and for how long. However, in contrast to the glaring absence of any savings assurance that Michigan drivers could “take to the bank,” the bills are rife with myriad ways that the insurance industry loyalists in the Legislature plan to take Michigan drivers “to the cleaners” by stripping them of their unlimited medical benefits.

Silence about No-Fault insurance “savings”

The remarkable and telling thing is that the most authoritative figures in Michigan’s auto insurance industry have now stopped making the “savings” pitch for so-called No Fault “reform.”

In recent statements to the Flint Journal, the Bay City Times and the Battle Creek Enquirer and AnnArbor.com, Insurance Institute of Michigan Executive Director Pete Kuhnmuench has steered clear of claiming that Michigan drivers will save money by forfeiting the unlimited medical benefits they are guaranteed under Michigan’s current No-Fault Law.

Similarly, in statements made to the Livingston Daily and the Lansing State Journal, neither Citizens Insurance Company of America Regional President Paul J. Mueller nor Farm Bureau Insurance Executive Vice President James Robinson have equated the abolishment of Michigan drivers’ right to unlimited No-Fault medical benefits with saving money on auto insurance and/or paying lower auto insurance premiums.

Given the importance of the “savings” charade to the overall campaign for so-called No Fault “reform,” the silence on the issue by the movement’s leaders says more about both “savings” and so-called “reform” than words ever could.

And since there are no more empty promises of savings, our insurance lawyers beg the question: WHY take away our most important No-Fault protections?

Michigan drivers will not save money on their premiums. In fact, there is no benefit whatsoever for Michigan drivers. The only player who would benefit is the auto insurance companies, who stand to save over $100 million a year to those who need help the most – people who are seriously injured and who will be forced from auto insurance onto Medicaid.

Steven Gursten is recognized as one of the nation’s top insurance lawyers handling serious auto and No-Fault insurance lawsuits. He frequently writes about Michigan No-Fault law and “reform,” and is available for comment.

Related information to protect yourself:

A simple way to help save Michigan No-Fault: write your representatives

Excessive rates being charged by Michigan auto insurance companies

Michigan No-Fault insurance resource center

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 (248) 353-7575 for a free consultation with one of our Michigan insurance lawyers.

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