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Harm caused by temporary car insurance is far from temporary

January 17, 2018 by Steven M. Gursten

Temporary car insurance, such as 7 day policies, hurts uninsured drivers in cities like Detroit & Flint – who will face severe consequences after a car accident

Temporary car insurance, such as 7 day policies, hurts uninsured drivers

Temporary car insurance policies, such as the 7 day car insurance policies offered by companies like L.A. Insurance, are leaving a wide swath of damage and harm in their wake that is anything but short-term.

Last week, in my blog post, “It’s time to stop 7 day insurance policies,” I said of these temporary car insurance policies:

“It’s where the greed of Michigan No Fault car insurance companies merges into the reckless indifference of Michigan lawmakers. It enables massive insurance fraud in many Michigan cities like Detroit. It jeopardizes the public’s welfare … [And, by helping “people violate Michigan’s mandatory requirement that owners of motor vehicles have auto No Fault insurance,”] [i]t allows up to a 1.5 million people drive without insurance in this state.”

What does a Metro Detroit car accident lawyer know about temporary car insurance anyways?

Now, I know from some of the comments I received last week, that when I speak out about the damage caused by these ultra-short term temporary car insurance policies, people say that as a “Detroit car accident lawyer,” I have a financial interest in the issue.

To those people, I reply …  Yes. I do.  But so do you.

As an auto accident lawyer who has a law office in Detroit, I have a unique perspective on this because I’ve seen since 1995 (when Michigan’s law was changed) what happens to people who are seriously injured in car accidents with no auto No Fault insurance.

And as a lawyer who has spent the last 25 years helping car accident victims who have been seriously injured by uninsured drivers, I want all 8 million registered drivers on Michigan’s roads to be properly insured so when car accidents happen and a person injures or kills another innocent person, the necessary provisions for No Fault insurance benefits and pain and suffering legal compensation will be in place for the victim.

We all have a stake in this. We all have family, friends, and co-workers who are at risk by being involved in a car accident with one of the 1.5 million uninsured drivers on Michigan roadways.

Even the people who say the uninsured get what they deserve (without really understanding just how draconian Michigan law is in punishing the uninsured) still don’t understand they are paying significantly more money for car insurance to offset the costs and losses of over a million drivers on the road without required insurance. In some areas, such as Detroit, the cost of auto insurance is significantly higher than it should be precisely because there are so many uninsured drivers.

How could eliminating temporary car insurance help lower prices for drivers?

Short-term policies allow people to violate the law and drive without insurance.  That’s why they exist.

Fewer uninsured drivers helps to lower expensive car insurance prices – and significantly lowers the cost for coverage such as uninsured motorist coverage.

Conversely, when there are fewer drivers paying into the auto No Fault system in Michigan, insurers bump up premiums on the insured drivers to make sure they have enough money to cover the total risks presented by both the uninsured and insured driving population.

These temporary car insurance and 7 day policies hammer and harm the uninsured

As I’ve said, temporary car insurance such as the 7 day insurance policies that L.A. Insurance sells in Detroit enables and encourages drivers to dodge the No Fault law’s insurance requirements.

But what those drivers don’t think about is how – by gaming the system – they’re setting themselves up for certain financial and legal disaster if they’re ever involved and/or injured in a car accident.

Specifically, one of the biggest travesties of justice we see is the incredibly draconian law we have in Michigan that punishes uninsured drivers more than any other state in the nation: not only do they lose all NF protection – which they should if driving uninsured – but somehow we have allowed them to lose their 7th amendment right under the Constitution, that even if they are paralyzed by a hopped up trucker while they did nothing wrong stopped at a red light, they can’t even sue the trucker for pain and suffering compensation.

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