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Upper Peninsula Rep. LaFave calls for No Fault law repeal

December 27, 2017 by Steven M. Gursten

With nearly 29,000 Upper Peninsula constituents violating MI No Fault law by insuring cars in Wisconsin, Rep. LaFave calls for adoption of tort-based system 

Upper Peninsula lawmaker wants to repeal MI No Fault law

I have a unique perspective on an Upper Peninsula lawmaker’s call to replace Michigan’s auto No Fault law with a tort-based system.

As a car accident lawyer, I’ve litigated cases both in Michigan and also in many pure tort states (where a lawyer can sue for everything in a lawsuit – all the medical bills, wage loss, etc. from a car accident).

In short, a pure tort system is great for the car accident lawyers, but a pure tort system is absolutely terrible for all the people who are seriously hurt in wrecks.

Having seen both sides up close, it would seem that if Rep. Beau LaFave (R-Iron Mountain) were more concerned with serving his District 108 constituents than he is with making headlines, he would be better served focusing his energies on trying to get people to stop cheating the No Fault insurance laws in Michigan, instead of calling for its complete replacement.

29,000 Upper Peninsula drivers have motor vehicles insured in Wisconsin

There are nearly 29,000 Upper Peninsula voters – “upward of a third of [Rep. LaFave’s] constituents” – who have registered and insured their cars in Wisconsin, leaving them uninsured and dangerously exposed if they are involved in a car accident.

Not only would these people NOT be able to receive Michigan No Fault first-party protections after a crash, but they wouldn’t even be able to sue an at-fault driver who injured them for their injuries and pain and suffering.

Recently, Rep. LaFave told MIRS that his “pitch” for 2018 to the Michigan House of Representatives leadership and to the Chair of the House Insurance Committee will be to “repeal” No Fault and implement a “tort system … where the at-fault driver is held responsible for damages.”

The first thing that came to my mind – even before thoughts about how a tort system would not begin to solve the problems he’s concerned with – was how hypocritical this is of him if he is truly concerned with the best interests of the people he represents.

Indeed, by his own admission in statements to the media, approximately 30% of the 87,266 people in his district – District 108, which encompasses Delta, Dickinson and Menominee counties – are lying about living in another state in order to avoid having to pay Michigan’s high insurance prices:

  • “‘Upward of a third of my constituents have license plates on their vehicle that say “Wisconsin …”’” (Rep. LaFave to MLive’s Emily Lawler, “Auto insurance costs a concern for new state reps as legislature returns,” January 10, 2017)
  • “I have walked through nearly every neighborhood in Delta, Dickinson and Menominee counties, getting to know the people I represent in the state Legislature. Far too many homes have vehicles with Wisconsin license plates parked in the driveway. When I ask why, I always get the same answer: Michigan’s car insurance rates — the highest in the nation — are simply unaffordable. Sadly, many residents are buying cheaper car insurance and getting vehicles registered in neighboring states, or not buying any auto insurance at all.” (Rep. LaFave, Daily Press, Opinion-Local Columns, “Choice saves drivers money on car insurance,” October 11, 2017)

It’s also a bit ironic that Rep. LaFave is championing the actions of those who have been insuring motor vehicles in Wisconsin that creates additional financial hardships for all the law-abiding drivers in the Upper Peninsula by driving up the car insurance prices in Michigan.

The second thing that came to mind when reading of Rep. LaFave’s hopes to repeal No Fault is how misguided and uninformed he appears to be.

Yes, Michigan No Fault is too expensive. There are a lot of good ideas that can lower the price of car insurance and still protect Michigan drivers who are badly hurt in car accidents.

As I discuss below, replacing Michigan’s auto No Fault law with a tort-based system won’t fix these problems, but it will create a lot of big new problems for any Upper Peninsula resident seriously injured in a car accident.

Will replacing the No Fault law with a tort system solve the car insurance problem for Upper Peninsula drivers? 

If the issue is lowering high auto insurance prices, then the answer is “No” – especially because the elimination of the auto No Fault law will do nothing to bring down the high prices of other very expensive lines of auto insurance, such as comprehensive and collision.

Additionally, Rep. LaFave is wrong in his thinking that, under a tort system, there will be fewer car accident lawsuits.

If he thinks there are a lot of car accident lawsuits now, just wait.

Car accident lawsuits will explode under a tort system.

If Rep. LaFave gets his holiday wish, there will now be a lawsuit guaranteed after every single little fender bender, because, otherwise, his Upper Peninsula car accident victims will have no other recourse for getting their medical expenses and lost wages paid and reimbursed.

Of course, this isn’t limited to residents in Rep. LaFave’s District 108. Car accident litigation would explode throughout the state because it would be the only way for people to get back their bills and out of pocket costs after a wreck. That’s great for the car accident lawyers, but it is certainly not great for everyone else.

Repealing the auto No Fault law in the Upper Peninsula creates big new problems

Aside from causing an explosion – rather than a reduction – in lawsuits and likely doing little to lower overall auto insurance prices, shifting from a No Fault to a tort-based system would result in the following:

  • Greater uncertainty that victims would ever get the medical care and lost wages reimbursements they need.
  • Greater likelihood that victims would have to pay out-of-pocket for medical expenses and, thus, risk financial ruin and bankruptcy.
  • Increased health insurance costs and increased tax burdens for Medicaid and Medicare as victims turn to these entities for help when the at-fault drivers are underinsured and/or judgment-proof or the victims, themselves, were at-fault for their accidents.

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