Pro-insurance rulings, misuse and abuse of No-Fault system by insurers, defense lawyers and adjusters, politicians’ pro-insurance, anti-consumer ‘reform’ plans threaten to gut of the best insurance system in the nation
I’ve spent the last two days writing about how Forbes magazine was right for saying we need to keep No-Fault insurance in Michigan, and why Michigan’s No-Fault system is so much better than all the alternatives.
Today, I’m going to switch gears and talk about what I see threatening to literally gut the best insurance system in the nation. And if these changes happen, maybe the critics of auto No-Fault insurance are right after all.
Maybe Michigan should dump our No-Fault insurance system and revert back to being a “pure Tort” state — like we were before 1973 when the No-Fault law was enacted.
Under our current No-Fault system, a car crash victim gets No-Fault insurance benefits to cover medical costs and lost wages and attendant care from his or her insurer regardless of fault, i.e., whether the victim or someone else caused the car accident.
By contrast, in a pure Tort state, the only way an auto accident gets her medical bills paid or gets reimbursed for wages she lost because she was too disabled to return to work is if she sues the other driver — and is lucky enough to have been hit by a driver with huge insurance policy limits to cover all the loses and harms they cause. It’s a roll of the dice, to say the least. If you’re paralyzed by a Coca-Cola or Walmart truck, you’ll at least get all your economic losses and recover compensation for your injuries and pain and suffering. If you’re paralyzed and hit by an underinsured driver, you lose your life savings and end up on Medicaid and declaring personal bankruptcy because of medical debt.
No, that isn’t an oversimplification. That’s the Russian Roulette that people play every time they get behind the wheel in pure Tort states.
Keep auto No-Fault insurance in Michigan because it is the right thing to do
Despite years dissecting troubling pro-insurance rulings by the courts in Michigan, I still think Michigan’s No-Fault insurance system is fantastic.
During my 23 years as an auto accident attorney, not a day goes by where I haven’t seen how No-Fault benefits, such as payment of medical bills and lost wages, saves car crash victims and helps them and their families rebuild their shattered lives after a serious car accident.
But what I’ve also seen is the extremely troubling and growing trend of courts, judges, insurance companies, their defense lawyers and adjusters and pro-insurance politicians steadily chipping away at our auto No-Fault benefits and protections that car crash victims desperately need — and that drivers pay dearly for with their premiums.
How would a pure Tort system eliminate the worst of our auto No-Fault insurance in Michigan?
It’s because of the erosion of No-Fault insurance by pro-insurance company judges and politicians that I have at times sounded the warning that if the pendulum swings too far, that we must be prepared to replace our auto No-Fault insurance system with a Tort-based liability system.
The PIP benefits and insurance protections guaranteed to car crash victims have been, are already, and will continue to be under harsh attack.
My concern is that if this assault on No-Fault continues, and in particular if the Republican party that currently controls all three branches of government in this state, remains more concerned with making the insurance industry lobbyists who donate now unlimited amounts of money to their electoral campaign happy (thanks to Citizens United) than they are with what’s for the public good, that drivers and auto accident victims will, eventually, be better off without No-Fault.
The steady stream of pro-insurance-company rulings from the courts, the misuse and abuse of No-Fault by auto insurers and the draconian, ludicrous proposals for so-called No-Fault “reform” are gutting the best of No-Fault and saddling victims and drivers with the worst:
- Uncertain, illusory and inadequate No-Fault insurance coverage.
- Absurdly arbitrary restrictions on suing for pain and suffering compensation.
- No protection against insurer-committed No-Fault fraud because the Michigan Consumer Protection Act doesn’t apply to insurance companies and because Michigan has neither “bad faith” nor punitive damage laws.
- Negligible, if any, savings, which will be reduced or likely cancelled out by increased costs for health insurance, out-of-pocket expenses, legal services and, ironically, auto insurance. Plus, there will be increased tax burdens for Medicare and Medicaid.
At least with a pure Tort system, drivers and car crash victims won’t be under any illusions about what they’re legally entitled to (i.e., nothing) or what they need to do to get what they need (i.e., sue for medical expenses, lost wages and pain and suffering compensation).
The No-Fault safety net — as tattered as it’s becoming — will no longer be there to catch car accident victims when they “fall.”
How is No-Fault insurance being eroded by judges and politicians?
There are many forces working to undermine the vital benefits and protections that the No-Fault insurance law guarantees to car accident victims, including, but not limited to:
- The Michigan Supreme Court has ruled in favor of auto insurance companies — over car crash victims and consumers — in 84% of major No-Fault insurance cases.
- By giving a jaundiced eye to No-Fault insurance protections, appellate and trial judges have opened the door to car accident victims being erroneously and maliciously denied and cut-off from benefits through such horrendous rulings as Bahri v. IDS.
- Politicians want to eliminate the No-Fault Law’s guarantee of “unlimited” benefits (so long as they’re “reasonably necessary”) and replace it with caps on No-Fault medical benefits, eliminate catastrophic injury coverage and force auto accident victims into managed care systems (i.e., HMO’s) where “preauthorization” from the insurer is required for all medical care and treatment.
- Politicians want to make it harder for already vulnerable, uninsured motor vehicle accident victims (such as bicyclists and pedestrians) to get No-Fault benefits.