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I WISH I had Michigan No Fault!

January 19, 2017 by Steven M. Gursten

The father of a car accident victim with traumatic brain injury who moved from Michigan recently extols the value of our state’s auto No Fault insurance system

Today I wanted to share a reader comment that was left on our blog post called “Paying for No Fault coverage you’ll never, ever get.” The post was regarding one of many No Fault insurance so-called “reform” bills that were proposed in Michigan and that thankfully never made it to law.

Here’s what Mr. Bob Metzner wrote:

“My son was TBI as the result of an accident he sustained in 2006. I’ve since moved to Florida and only WISH I could buy such Insurance in this State. Here, I can buy a MAXIMUM of 10,000 in PIP protection. That’s not even a weekend in a Hospital. Very thankful I have Michigan No-Fault to this day.”

Why Michigan is fortunate to have our auto No Fault law

This comment reminds us how very lucky we are to be in Michigan, where our auto No Fault law currently allows for, among other valuable insurance benefits, the reimbursement of all necessary medical care for as long as your car-accident related injuries persist. Michigan is the only state in the country that has this incredible auto No Fault benefit.  It provides a quality of care for Michiganders who are seriously injured in automobile accidents that are not available anywhere else in the country.

The alternative to Michigan’s auto No Fault laws are often bleak for car accident victims in other states. In states such as Florida, after the PIP ceiling of $10,000 is exhausted (and it can be wiped out in one overnight stay at a hospital), people who do not have health insurance, or who have health insurance with auto accident exclusions, can lose everything and face personal bankruptcy with seemingly insurmountable medical bills.

The alternative also costs taxpayers more. Car accident injury victims with serious medical treatment needs must turn to Medicaid to cover necessary medical care. Not only is the quality of the medical care itself inferior to what we have in Michigan under our No Fault laws, but it costs the public more as the cost of this medical care is shifted to the public to pay.

Michigan No Fault insurance benefits also reimburse your lost wages if you’re too injured to immediately return to your job after a motor vehicle accident. This saves people from losing everything while they’re temporarily disabled and recovering from their injuries.

Yet the terrible irony is that most people don’t understand Michigan No Fault –  until it’s too late – and that is almost always after they or someone they love has been injured in a car crash. It’s very easy for the auto insurance companies and the Republican lawmakers who are beholden to the powerful insurance lobby to try to take away No Fault protections when the people that they protect do not understand them. They simply say “we’ll cut the cost of auto insurance!” and for many people, that’s enough.  They don’t realize that it isn’t that simple, and that many of these bills will take away important protections but without reducing the cost of auto insurance for drivers. In fact, this Auto Lawyers Blog has been critical of the many Republican-sponsored bills that have specifically avoided making any promises or guarantees of meaningful, long-term car insurance reductions for Michigan drivers.

What are my No Fault benefits under Michigan’s Auto Law?

Here’s a quick summary of your No Fault benefits:

  • Medical expenses – Reimbursement of your auto accident-related medical bills.
  • Medical mileage – Reimbursement for the miles traveled to medical appointments.
  • Attendant care – Coverage for in-home nursing services.
  • Wage loss – Money to replace what you’re not earning while you’re missing work.
  • Replacement services – Help with household chores, services and child care.

But Michigan No Fault is too expensive – or is it?

These are your auto No Fault rights as they exist now, under Michigan’s auto law.  It’s important to note that this past 2016 legislative session had more proposed changes to the Michigan No Fault law than any year I’ve seen. These proposals have been rolling in for the last several years. Our own auto accident lawyers have been harsh critics of bills that would seek to dismantle the life-saving medical benefits and legal protections guaranteed to seriously injured auto accident victims by our state’s No Fault laws — especially under the guise that No Fault benefits jack up the price of car insurance in Michigan due to the medical expense reimbursement provision.

Most of these proposed changes to Michigan’s auto No Fault laws are simple and ugly boondoggles proposed by lawmakers beholden to the state’s powerful – and highly profitable – insurance industry. And Michigan drivers get a whole lot for what they pay for in car insurance dollars. In fact, what we pay here isn’t far off from several other U.S. states with far fewer medical benefits and legal protections.  Michigan’s auto No Fault insurance system is an incredible bargain for Michigan drivers.

Let’s explore some of the myths about the cost of our No Fault insurance system that our attorneys often see and that should be properly debunked:

Myth: Michigan car insurance is overpriced compared to neighboring states.

Truth: As I discussed in my blog post on the top 4 myths regarding Michigan No Fault reform comparing the cost of car insurance in Michigan to Minnesota, Wisconsin, Illinois, Indiana and Ohio, we have a classic example of comparing apples to oranges.

With regard to Minnesota, the only other No Fault state in the bunch, it’s true that Michigan auto insurance premiums are slightly higher.

But when one compares Michigan’s guarantee of unlimited, necessary lifetime No Fault medical benefits, which could run into the millions of dollars, to Minnesota’s $20,000 cap on No Fault medical benefits, it’s clear that Pete Kuhnmuench, former Executive Director of the Insurance Institute of Michigan, was right when he said “[m]otorists in this state are getting a bang for their buck when it comes to protecting themselves in the case of a traffic crash.” Please take a look at this blog for many other positive things Kuhnmuench has said about Michigan No Fault.

In addition, comments by a spokesperson for the Insurance Information Institute (III) provide the proper perspective for considering the auto insurance price differential between Michigan and the other four states, all of which rely on tort systems for resolving auto accident-related medical benefits claims.
In an interview with the South Florida Sun-Sentinel about the possibility of Florida dropping its No Fault auto insurance system and going to a tort system, the III spokesperson identified the following “negatives for the consumer:” slower handling of claims; delays in getting medical treatment; and, “[t]here is likely to be more lawsuits.”

People forget that the reason Michigan turned to its own No Fault insurance system in 1973 was because the previous “tort system” resulted in thousands of small lawsuits that were clogging our courts. Most of these small lawsuits were only for small medical bills and a few days or weeks of wage loss from people who were hurt, but not seriously, in car accidents. This all went away when Michigan enacted our No Fault law.

Michigan’s auto insurance system allows car accident victims access to prompt and high quality medical treatment, and it removes many of the small lawsuits that clog courts in other “pure tort” states and states like Florida with very low medical caps. We get quite a bit more than anyone else in the nation, but the price we pay is still comparable to many other states but with far less benefits and legal protections.

Related info:

Six tips for getting your medical bills paid after a crash

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