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Uninsured drivers in Detroit: How this has become a civil rights issue

April 22, 2013 by Steven M. Gursten

Attorney Steven Gursten in B.L.A.C. Magazine, on the staggering penalties for uninsured drivers  in Detroit

I was recently interviewed by B.L.A.C. Magazine. The story focused on the high cost of No Fault insurance, and the crisis resulting from more than 50% of Detroit drivers who do not have auto insurance driving on the road today.  It starts with very high auto insurance rates in urban cities like Detroit that many people cannot afford.

Here’s the full story: High Cost of Insuring Cars in Detroit.

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

Let me start by explaining the crisis: There’s an epidemic of uninsured drivers in Detroit because the No Fault premiums are so high, despite the  law requiring all drivers to carry No Fault insurance on their automobiles.

In Michigan, rates are also  based on ZIP codes and credit scores. And the average cost to insure a car in Detroit for one year is a whopping $5,948, roughly $495 a month, according to the Insurance Institute of Michigan.

The Michigan  No Fault laws provides unlimited necessary medical benefits to seriously injured automobile accident victims for life, and Michigan drivers are required to buy personal injury protection (PIP) coverage as part of their policy, which now costs $186 per vehicle.

As I told the reporter, Trevor W. Coleman, while Michigan’s auto accident coverage is the nation’s best  for automobile accident victims, it’s cost-prohibitive for the working poor in our inner cities. Meanwhile, the state’s Insurance Commissioner R. Kevin Clinton is one of the only insurance commissioners in the nation without the authority or power to keep insurance companies from gouging consumers.

This has led former insurance commissioners, such as Jay Angoff, to find that Michigan’s auto insurance companies are “highly profitable” and that these companies make considerably more selling insurance than the national average. I discussed this in my recent guest column in the Detroit Free Press: “Profits, not medical claims, drive up the cost of auto insurance in Michigan.”

This, plus credit scoring, is a double-whammy for people who live in urban cities like Detroit.

As I said in the story in B.L.A.C., “The bean counters at these insurance companies weren’t dumb. They know full well that Detroit, for example, has I believe the lowest medium income in the nation and then, on top of that, our wonderful Republican Michigan Supreme Court has allowed companies to use credit scoring so people get hammered twice in terms of insurance being very expensive.”

The civil rights issue and how uninsured Detroit drivers are in jeopardy

What most people don’t know is how draconian and punitive Michigan law is for uninsured drivers.  When a driver is uninsured, he is barred under our law from suing for pain and suffering, even if he was completely innocent.

This means tens of thousands of people, including many minorities in cities like Detroit, are barred not only from receiving compensation for injuries caused by another driver at fault in a car accident, but they are also barred from collecting No Fault insurance benefits.

And, based upon a recent change to our mini-tort law, they are now also barred from collecting the mini tort for car damage caused by an at-fault driver.

These incredibly harsh penalties, including having the constitutional right to a jury trial, have been taken away from these largely African-American accident victims.  And no one seems to know about this or want to talk about it.

As an attorney protecting auto accident victims for nearly 20 years, not a week goes by without someone calling my office about a loved one being killed, paralyzed or having a limb amputated. Yet nothing can be done for them because the accident victim did not have auto insurance — even if they were killed by a drunk driver, or were sitting at a red light and rear-ended by a truck driver on drugs.  These completely innocent people get nothing.

I say this is a civil rights issue because our law is disenfranchising tens of thousands of mostly black, inner city Detroiters.  The weight of this law falls disproportionately on these drivers because they are more likely to be driving uninsured.

The insurance companies and the Republicans knew exactly what they were doing in 1995, and the case that upheld this needs to be overturned.

The article also referenced that because of unaffordable rates, there are ever-growing number of people carrying fraudulent certificates of insurance. While most of these people are not hardened criminals trying to beat the system, they are still being punished with misdemeanors or felonies.

This horribly unfair, as you have hard-working people struggling to make it who are punished further. If they are punished with a felony, their ability to get jobs and thrive is negatively affected.

But capping No Fault medical benefits under No Fault reform is not a “sliver of hope” for Detroiters

Trevor Coleman did a great job of illustrating the safety crisis for Detroiters who cannot afford auto insurance and are unfairly charged higher rates.

But I’d like to respectfully point out one area where I disagree with the story.  Mr. Coleman wrapped up his story by stating that past (and current) No Fault “reform” bills that would cap medical benefits offer Detroiters a “sliver of hope.”

This is not the case. That is simply what the insurance companies want you to believe.

Capping No Fault medical benefits does nothing to lower rates and the insurance industry and lawmakers who push such dangerous measures have shown no proof that premiums will be lower.

Capping medical benefits will only hurt the people who need the protection of No Fault insurance the most – the otherwise uninsured who suffer catastrophic personal injury and who live in cities such as Detroit.

The real answer is to allow our insurance commissioner to regulate excessive insurance company profit margins the No Fault insurance that we are forced by law to purchase.  This would lower insurance premiums immediately, while preserving vital legal protections for the rest of us, especially Detroiters.

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

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