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What about the No Fault fraud committed daily by MI insurance companies?

September 17, 2015 by Steven M. Gursten

Bridge Magazine’s recent No Fault fraud reporting missed  the rampant fraud and abuse by insurance companies

No Fault fraud

What about all the rampant No Fault fraud and abuse committed every single day by Michigan’s auto insurance companies? What about the tremendous harms and hardships these abuses cause completely innocent citizens because claims adjusters ignore valid and owing claims?

That was my reaction when reading Bridge Magazine’s otherwise excellent story on No Fault fraud  in “An accident runner, a chiropractor, and the push to curb no-fault insurance,” August 25, 2015.

As an attorney, I’ve spoken out many times about the real ugliness I see being committed today by many plaintiff personal injury lawyers.  I was very active in the passing of the solicitation laws (although I also wrote at the time they didn’t go far enough). I should also note these lawyer ambulance chasing and solicitation rules are not currently being enforced, and so I’m seeing the 30- day solicitation ban being violated and ignored by many lawyers.

And I agree that No Fault insurance fraud is a scourge on the system and it must be brought to a conclusive end as quickly as possible, because it threatens the entire continued viability of our No Fault insurance system in Michigan.

But I also believe, based on my own personal experience as an automobile accident lawyer, that the fraud and abuse that exists today goes both ways. The incredible abuses and fraud I see almost daily being committed by Michigan’s auto insurance companies is nothing less than shocking. It also wrecks lives and causes incredible harm to auto accident victims.

This was completely ignored in the Bridge Magazine story.

As a counterpoint to Bridge’s Nancy Derringer’s discussion about No Fault auto “insurance fraud network[s]” and “how the culture of [No Fault auto] insurance abuse works here,” I would have liked to have seen her also include  how Michigan’s auto insurance companies pay hired-gun insurance doctors to conduct so-called “independent medical examinations” – or IMEs.  The primary purpose of these laughable 10- or 15-minute IMEs is to cut-off people who desperately need surgeries that are recommended by real doctors, and to stop payment of desperately needed wage loss checks that prevent people from paying their mortgages or putting food on the table.

For instance, I’ve previously written about how State Farm implemented an IME policy whose sole purpose was to save the company approximately $30 million in No Fault claims payouts – every year.
To learn more about State Farm’s $30 million IME policy, please check out my blog post, “Why State Farm’s $30 million IME policy for MI auto accident victims is a joke.”

Additionally, while we’re talking about “fraud networks” and “how the culture of insurance abuse works,” I think the public would also be interested in the other examples of No Fault fraud, abuse and misuse by Michigan auto insurers. For instance:

  • Progressive lying and fabricating its own rules for what an auto accident victim must show in order to collect No Fault wage loss benefits.
  • Farm Bureau trying to trick auto accident victims by stubbornly and wrongfully continuing to use an “unenforceable” venue provision in its UM/UIM (the same one that the Michigan Court of Appeals declared “unenforceable” eight years ago in 2007.
  • Progressive Marathon trying to dupe an auto accident victim into forfeiting all present and future No Fault medical benefits by including “Full and final settlement of PIP claim” on the victim’s No Fault wage loss check.
  • Esurance making a low-ball settlement offer to try to take advantage of an unsophisticated injured auto accident victim who didn’t have a lawyer.
  • Home-Owners “sandbagging” an auto accident victim by withholding vital evidence until it was too late for the victim to file the necessary claim against the proper auto insurer. And then using the same evidence as a justification for avoiding payment of No Fault benefits.

As an attorney, I’ve seen first-hand the wondrous things that Michigan’s No Fault insurance system does to help catastrophically injured auto accident victims and their families. I speak out to try to save this amazing system, which has often been referred to as the nation’s very best auto insurance system.

Fraud is being committed both ways: By lawyers who shouldn’t have a license; but also by insurance companies who do not have to worry about bad faith laws, punitive damages, or a consumer protection act in this state. These insurance companies treat innocent people horribly in Michigan, in ways they simply couldn’t get away with in other states that have legal protections against insurance company abuse.

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