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Paying for No Fault catastrophic insurance coverage you’ll never, ever get

November 7, 2016 by Steven M. Gursten

Rep. Jason Sheppard’s No Fault reform bill (HB 5951) rips off drivers, keeps them paying annual MCCA assessments they can never collect


How do you feel about paying for insurance coverage that you’ll never, ever be able to collect?

If you’re okay with a rip-off like this, then Rep. Jason Sheppard’s (R-Temperance) No Fault plan is for you.

Under his House Bill 5951, which was officially introduced on October 19, 2016, Rep. Sheppard proposes to allow Michigan auto No Fault insurance consumers to opt-out of the catastrophic coverage that’s currently guaranteed by the No Fault Law.

But – and here’s the rip-off part – he doesn’t allow them to opt-out of continuing to pay.

For a bill the lawmaker says was intended to save consumers money, this something-for-nothing provision adds up to quite a fleecing of Michigan drivers.

It’s a great bill for the auto insurance industry, but it’s terrible for the people that Rep. Sheppard says he’s so concerned with.

This is just one of the many reasons why, in early October when Rep. Sheppard released a draft bill (that’s identical to HB 5951) to the public, I said his plan is “bad for consumers” and car accident victims.

Keep those MCCA No Fault fees coming!

Rep. Sheppard has said the key to his plan’s ability to save consumers “as much as 30 percent, or more” on their MI No Fault automobile insurance is to allow them to opt-out of their long-standing unlimited medical benefits (which encompasses catastrophic coverage) and opt-into limited medical benefits at levels of $250,000, $500,000 and $1,000,000.

What he hasn’t said is that opting-out of the unlimited catastrophic personal injury coverage doesn’t relieve them of the responsibility of paying for it.

This is part of your annual MCCA assessment. Under Rep. Sheppard’s plan, you would continue to pay for this MCCA assessment even after opting out of your own ability to collect auto No Fault unlimited personal injury medical benefits if you’re ever seriously injured in a motor vehicle crash.

Both now and under the lawmaker’s HB 5951, catastrophic injury coverage is paid for by the Michigan Catastrophic Claims Association (MCCA), which raises money by charging MCCA assessments to Michigan auto insurers who pass along these assessments to consumers in the form of higher car insurance rates.

Currently, the annual MCCA assessment is $160.

Paying the MCCA’s assessment for catastrophic injury coverage wouldn’t change under HB 5951. The only thing that would change is the folks who were lured by a promise of “savings” on auto insurance are now opting-out of unlimited, catastrophic coverage and getting nothing for their money.

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