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Why our No-Fault insurance system is worth keeping — and fighting for

August 2, 2017 by Steven M. Gursten

Michigan’s No-Fault insurance system provides lifetime necessary care for seriously injured car crash victims, medical care and coverage is better than health insurance; payment for lost wages; attendant care

Thumbs Up to No-Fault Insurance System

Yesterday, I wrote about Forbes magazine’s conclusion that Michigan should keep its No-Fault insurance system to protect car crash victims.

Today, I’m going to discuss why Michigan’s No-Fault insurance system is worth the fight to keep and preserve.

Tomorrow, I’ll talk about the alternative we may be heading toward in lame duck this year:

Whether the proposals being offered in Lansing to “reform” Michigan’s No-Fault insurance system (many at the behest of the powerful insurance industry) will lead Michigan toward its former status as a “Pure Tort” state, an insurance system where everyone loses — especially those with the worst injuries from the worst car accidents.

Forbes gives MI’s No-Fault insurance system the thumbs up

In its article, “Is It Time To Do Away With No-Fault Laws?,” Forbes understatedly acknowledged that “most drivers enjoy” Michigan’s No-Fault insurance and “many [car crash] victims also still rely on it …”

Those statements are undeniably true … and for very good reason.

In fact, here are just a few of the reasons why Michigan’s No-Fault insurance system really is great:

  • Car crash victims get No-Fault insurance benefits, regardless of who was “at fault” in causing the car accident. (MCL 500.3105(2)) Contrast that with how things work in a “tort” state, where medical benefits and wage loss benefits can be recovered only after an auto accident victim hires a lawyer, sues and succeeds in proving that the motor vehicle accident was all someone else’s fault.
  • Michigan No-Fault insurance benefits are available to auto accident victims on an “unlimited” basis, so long as the benefits are “reasonably necessary” to a car crash victim’s care, recovery or rehabilitation. (MCL 500.3107(1)(a))
  • Medical coverage under No-Fault insurance far surpasses coverage under private health insurance. Forbes reported that some No-Fault critics complain the insurance’s medical coverage is “redundant” because “most drivers already have health insurance” “through their own private plan or Medicare/Medicaid” and “it doesn’t make sense to have to pay for more health insurance when they already pay for their own plan.” Hah! The problem with that theory is that health insurance, unlike No-Fault Insurance, can’t be counted on to pay for the benefits and services that are vital to car accident victims. To learn more, see my discussion below.
  • No-Fault insurance’s medical claim coverage provides essential medical benefits to auto accident victim who don’t otherwise have personal health insurance. Forbes drove this point home with its reporting: “Estimates from the end of 2016 said there were still 600,000 people without health insurance in Michigan. Should any of those uninsured also be drivers, they would have no access to vital healthcare funds if they were injured in a car accident. Furthermore, according to Nielsen, only about 6% of Michiganders have disability insurance meaning the disability part of PIP would be vital for a vast majority of drivers.” To put it another way, Forbes said Michigan’s No-Fault insurance provides “quick easy access to health funds …”
  • No-Fault wage loss benefits reimburse motor vehicle accident victims 85% of wages they’ve lost because their accident-related injuries have disabled them from working. (MCL 500.3107(1)(b)) As Forbes recognized: No-Fault Insurance, which is also referred to as PIP (personal injury protection) insurance, “is also good in that it provides disability insurance, as well as medical insurance. Most standard healthcare plans won’t come with disability insurance … The lost wages portion of PIP can keep the pockets of drivers with crippling injuries who can’t work at least partially filled as they recover.”

Why is Michigan No-Fault insurance system superior to health insurance?

No-Fault insurance is far better than health insurance plans for auto accident victims in Michigan because:

  • Michigan health insurance policies contain auto-accident exclusions that deny coverage for medical treatment for injuries caused by a car accident.
  • Health insurance policies include limitations on — and/or non-coverage of — medical products, services and accommodations that are readily covered by No-Fault.
  • The managed care plans (or HMOs) that are required by most health insurers deny victims their “right” to choose their own doctor and could require the victim to obtain the insurer’s “pre-authorization” for medical services and prescriptions.

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