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“Low-Cost Automobile Insurance Pilot Program” under new No Fault “reform” plan

March 28, 2014 by Steven M. Gursten

Not low cost and not a lot of coverage

The saying is: “You get what you pay for.”

With respect to the “Low-Cost Automobile Insurance Pilot Program” proposed by House Speaker Jase Bolger and the House Republicans in their latest No Fault “reform” draft plan called Substitute for HB 4612, it’s probable that folks who buy into the low cost pilot program will not even be that lucky.

Here’s why  (the page numbers below refer to the full, 91-page draft bill):

  • No Fault coverage under the “Low-Cost” option extends only the owner or registrant of the insured vehicle – not her spouse, resident relative, passengers or pedestrians. (Pages 51-52, 68, 71)
  • “Low-cost” No Fault coverage pays “only if there is no other health and accident coverage available to the” low-cost insured “for the medical expenses incurred.” (Page 69)
  • “Low-cost” No Fault coverage pays “only for medical expenses …” It does not include wage loss, replacement services, or survivor’s loss benefits, or funeral expenses (Page 69, 71-72)
  • The coverage limit for low-cost No Fault medical benefits is $50,000. (Page 69, 71)
  • The “low-cost” plan doesn’t specify how much consumers will save on auto insurance premiums, nor does it specify what constitutes a “low-cost.”
  • If a person who is covered by a “Low-Cost” auto insurance policy is injured in a car accident caused by an at-fault driver, the low-cost insured’s recovery for non-economic loss is limited to $20,000 and the low-cost insured is barred from suing for excess allowable expenses, wage loss and survivor’s loss benefits. (Pages 54-55)
  • Creating a “Low-Cost Automobile Insurance Pilot Program” that neither guarantees a specific “low” cost for auto insurance nor provides for adequate coverage.

My series will continue Monday, with my analysis on the similarities and differences between the various plans for so-called No Fault “reform” that are currently under consideration in the Michigan Legislature.

 – Photo courtesy of Creative Commons, by 401(K)2013

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