Committee is changing laws in ways that will harm uninsured car crash victims but help insurance companies under assigned claims plan
There are a lot of innocent people out there who end up as uninsured car accident victims. Most uninsured are pedestrians who were hit by a car when crossing the street, or bicyclists hit by a passing car, or passengers in a car who aren’t covered by their own auto No-Fault insurance policy.
All of them are about to have a much harder time getting auto No-Fault PIP benefits through the Michigan Assigned Claims Plan (MACP).
As if uninsured car crash victims didn’t already have a hard enough time, now a new package of bills — approved by the Michigan House Insurance Committee on May 25, 2017 — wants to make it even harder for the uninsured to obtain No-Fault insurance benefits.
What does the Michigan Assigned Claims Plan already do for uninsured car crash victims?
The MACP ensures that auto accident victims who are not covered by a valid, No-Fault car insurance policy of their own or through a spouse or resident relative receive No-Fault benefits by assigning a Michigan No-Fault insurer to handle their claim.
Examples of the types of motor vehicle accident victims whom the MACP helps include pedestrians, bicyclists, passengers and other non-drivers who are involved in an injury-producing event with an automobile in the state of Michigan.
The MACP is administered by the Michigan Automobile Insurance Placement Facility.
What would change for uninsured car crash victims?
Under Michigan’s existing No-Fault Law, if a car crash victim can show he doesn’t have access to No-Fault auto insurance coverage, then he’s “eligible” for No-Fault PIP benefits through an insurer “promptly” assigned by the MACP.
However, under the proposed changes in House Bills 4624, 4625 and 4626, the rules — and the ease with which an uninsured auto accident victim could get the No-Fault PIP benefits he needs — would change drastically:
- The MAIPF and/or the auto insurers assigned by the MACP would be able to require victims to provide “reasonable proof of loss” — a standard that the MAIPF and the insurers would have exclusive and unlimited authority to define and enforce. (House Bill 4624)
- Car crash victims would have a “duty to cooperate” with the MAIPF. These “duties” would include, but not be limited to, submitting to examinations under oath and IMEs by insurance-company, hired-gun “physicians.” Significantly, it is the MAIPF that decides whether a victim is “cooperating.” And if the MAIPF determines a victim “fails to cooperate,” then the MAIPF “shall suspend benefits to the claimant under the assigned claims plan” until the MAIPF “determines that [the victim] cooperates or resumes cooperation …” (House Bill 4625)
The bills’ sponsors claim the proposed changes to MACP’s rules would refine the process to ensure that claims are reviewed and handled more swiftly and to reduce fraud.
This move would bring things to a standstill for uninsured car crash victims
As an attorney who has helped many car crash injury victims obtain No-Fault benefits through the Michigan Assigned Claims Plan, I can say with 100% certainty that these proposals will do nothing to make the process of applying for and delivering benefits run more smoothly.
If anything, it will bring things to a total standstill — which is perhaps what the insurance-company-controlled MAIPF wants … so, then, insurers can amass even greater profits by never having to make benefit payouts.
As for insurance fraud, it goes both ways.
I understand and agree wholeheartedly that measures need to be taken to reduce No-Fault fraud — by both fraud rings and by greedy, unscrupulous auto insurance companies who routinely cause great harm to people through bad faith adjusting policies but who are immune from lawsuits in this state for punitive damages, exemplary damages, bad faith lawsuits, or even from being sued under the Michigan Consumer Protection Act.
But the proposals in this package of bills effectively throws the baby out with the bath water.
If the argument from the bills’ sponsors — and the insurance industry lobbyists who, no doubt, contributed to the drafting of the bills — is that too few restrictions on victims seeking No-Fault benefits through the MACP somehow contributed to fraudulent claims, then imposing draconian, unprecedented restrictions and allowing insurers carte blanche authority to write and enforce their own rules is hardly a suitable or fair answer.
I’m hoping the full Michigan House will view this issue more critically than the House Insurance Committee members who voted to approve the proposed changes to the MACP rules.