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Reforms that will truly save you money on your No Fault insurance

February 25, 2013 by Steven M. Gursten

In his guest column in Bridge Magazine, auto law attorney Steve Gursten discusses his proposals for lowering auto insurance rates

Last week, I had the honor and pleasure of appearing as a guest columnist in Bridge Magazine when it ran my column, “Eight Steps That Will Lower Auto Insurance Rates.”

The point I made is one I’ve made many times before:

“If the goal of reforming Michigan’s ‘No Fault’ system is to lower auto insurance prices for Michigan drivers (instead of just boosting insurance company profits and bottom lines), then we need to focus on ‘reform’ proposals that will truly help Michigan drivers save money on car insurance.”

For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.

We need new thinking about real reform, not the old insurance company wish-lists that have been repeatedly rejected by voters and lawmakers.

In a 1992 Initiative Petition (Proposal D) and in a 1994 Referendum (Proposal C), Michigan voters overwhelmingly rejected legislative efforts to cut No Fault benefits for seriously injured car accident victims.

And, since 2008, the Michigan Legislature has rejected no less than seven bills proposing to “reform” Michigan’s No Fault system by, among other things, dismantling No Fault’s 40-year-old guarantee of unlimited, lifetime medical benefits for seriously and catastrophically injured car accident victims. (HB 4936, SB 649 and SB 293 (2011); HB 6094, HB 6095 (2010); SB 1278 and SB 1279 (2008)

As history has shown, pushing insurance-industry-backed legislation that slashes drivers’ No Fault benefits, but provides no guarantees of savings, is not the kind of No Fault “reform” that Michigan drivers want, need or deserve.

In my Bridge Magazine guest column, I offered the following eight proposals to accomplish the goal that Gov. Rick Snyder articulated in his State of the State address: Finding “a thoughtful way” to reduce Michigan’s “high auto insurance costs.”

Below are the highlights of my proposals. But for a full discussion, please check out my Bridge Magazine guest column:

  1. Bring back the “Buyers’ Guide to Auto Insurance,” which was published by the Office of Financial and Insurance Regulation, and provides auto insurance consumers with extensive, detailed rate information for approximately 60 auto insurers in 16 major Michigan cities.
  2. Michigan’s insurance commissioner should do an updated “excessiveness” study of our auto insurance prices.
  3. Michigan auto insurance consumers should have a “money back” guarantee whereby if Michigan auto insurance consumers don’t spend at least 80 percent of their insureds’ premium dollars on No Fault benefits, then insured customers should get their money back in the form of refunds or rebates.
  4. Michigan auto insurers to should be required to disclose annually how much of each premium dollar is returned to customers in the form of No-Fault claim payouts.
  5. Michigan No Fault Law should require annual disclosure and publication of claims trends.
  6. Restore the usefulness of the Michigan Consumer Protection Act (MCPA) to deter anti-consumer claims-practices by auto insurance companies.
  7. Michigan No Fault Law should be changed to prohibit auto insurer “bad faith.”
  8. Michigan No Fault Law should be changed to allow “punitive damages” against wrongdoing auto insurers.

My Bridge Magazine Guest Column, “Eight Steps That Will Lower Auto Insurance Rates,” has also been published as a guest column by MLive.

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