The playing field tilts dangerously in favor of insurance companies, if new proposed No Fault reforms in “Substitute for HB 4612” are enacted
The last thing injured auto accident victims need today is a harder time attempting to recover the No Fault insurance benefits, such as medical expense reimbursement and vehicle modifications, that they’re entitled.
As I’ve written before, Michigan is a state without bad faith insurance laws, punitive damages, or even a Consumer Protection Act that can protect consumers from insurance companies who deliberately cause harm by wrongfully withholding vital insurance benefits.
But under House Speaker Jase Bolger’s new No Fault insurance “reform” draft plan, that’s currently being called “Substitute for HB 4612,” auto accident injury victims in Michigan would have even more unreasonable and difficult hurdles to jump through.
This new bill would require auto accident victims and their treating medical providers to prove their need for No Fault PIP insurance benefits. It would literally flip our existing 40 years of No Fault on its head, and make the burden far harder for accident victims to recover the PIP benefits they need to recover.
Conversely, it would make it far easier for insurance companies to deny valid and legitimate claims. And as an attorney that practices in the area of No Fault law and litigation, when it comes to denying legitimate claims and making life harder for people who desperately need help, the insurance companies don’t need any more help.
They are doing just fine denying claims and harming people today.
The page numbers listed below refer to the full, 91-page draft bill.
Medical charges covered by No Fault
Currently, for an auto accident victim’s medical expenses or charges to be covered and payable by a No Fault auto insurer, the auto accident victim need only show that the charge or expense is “reasonable.”
Under the plan from Speaker Bolger and House Republicans, the charge – if paid by the auto insurer within 30 days – cannot be more than “125% of the amount that would be paid” under the Michigan Worker’s Compensation fee schedule. (Pages 43, 57-58)
“Reasonably necessary” No Fault benefits
Under our existing No Fault law, an auto insurer must pay all “reasonable charges” for products, services and accommodations provided to an auto accident victim, so long as the accident victim can show the products, services and accommodations are “reasonably necessary” for his or her care, recovery or rehabilitation.
Under the plan from Speaker Bolger and House Republicans, the words “reasonably necessary” have taken on a new, more ominous, and in a legal context, a much tougher-to-prove meaning.
Products, services and accommodations are not “reasonably necessary” if:
- They would’ve been “needed or used” by the auto accident victim regardless of whether he or she had been injured. (Pages 43-44)
- They are “not reasonably likely to result in meaningful and measurable lasting improvement in the injured person’s functional status.” (Pages 43-44)
Rehabilitation, home modification and vehicle modification benefits
Under existing No Fault law, to get rehabilitation, home-modification and vehicle-modification benefits covered by No Fault and, thus, payable by a No Fault auto insurer, an auto accident victim must show:
- The products, services and accommodations are “reasonably necessary” to an automobile accident victim’s care, recovery or rehabilitation.
- The charges are “reasonable.”
Under Speaker Bolger’s and the House Republicans’ plan, the standards are now more complex and tougher-to-prove in court:
- Rehabilitation benefits must be “reasonably necessary” and “reasonably likely to produce significant rehabilitation.” (Page 44)
- Home-modifications must be “directly necessitated by and related to the injured person’s injuries” and “functionally necessary to meet the injured person’s treatment, rehabilitation, maintenance and daily living needs.” (Page 45)
- Vehicle-modifications must be “directly necessitated by and related to the injured person’s injuries.” (Page 45)
Tomorrow, I’ll review the ways “Substitute for HB 4612” makes it easier for auto insurers to deny and terminate auto accident victims’ No Fault insurance benefits.