How will the Lucido plan affect uninsured drivers injured in car accidents caused by insured drivers? No Fault benefits for drivers that opt for Macomb Solution? The MCCA? Liability insurance?
When I last wrote about Rep. Pete Lucido’s “Macomb Solution” to get rid of mandatory car insurance requirement, I called the plan “ludicrous.” Lucido puts everyone on the road – those who are insured and those who elect to drive uninsured – at great risk of harm if they are ever hit and injured by an uninsured driver.
Let me repeat what I see so often as a car accident lawyer, which is that many people who are currently insured and are promised that they are “fully protected” by their insurance agents will be devastated by the Lucido plan. This is because they don’t have (and often don’t even know about) uninsured motorist coverage. This means that if the Lucido Macomb Solution plan adds hundreds of thousands or even millions of legally uninsured drivers who elect to drive without liability insurance on our roads, these insured people without uninsured motorist coverage will be unable to receive any money for their injuries and pain and suffering when they are hurt in car accidents by these Lucido uninsured drivers.
Today I want to go deeper than I did in my first analysis of Lucido’s so-called Macomb Solution, and dive deeper into the details of House Bill 5267, which is the official version of Rep. Pete Lucido’s plan to make purchasing car insurance optional that he introduced on February 22, 2018.
Is there a future for Michigan auto No Fault under the Lucido plan if it ends the requirement for mandatory car insurance?
Even though HB 5627 ends the “mandatory” legal requirement that drivers carry auto No Fault auto insurance, the proposed legislation would still make No Fault insurance available to drivers who opt to buy auto insurance.
But the optional nature will have devastating consequences for auto accident victims who are injured by at-fault drivers who do not have No Fault coverage. I explored this in greater detail in my initial blog post last Monday, “Lucido’s ‘Macomb Solution’ is ludicrous.”
How does the Lucido bill – HB 5627 – end mandatory car insurance?
Simply put, it no longer makes it illegal to drive without No Fault insurance. It changes the word “shall” to the word “may” so that the pivotal car insurance provision in the No Fault law would read:
“The owner or registrant of a motor vehicle required to be registered in this state may maintain security for payment of benefits under personal protection insurance and property protection insurance under this chapter and residual liability insurance as described in section 3009.” (Page 26)
How will No Fault benefits be different for drivers who opt for the coverage under the Lucido Macomb Solution plan to make car insurance optional?
Most importantly, drivers who opt to continue to protect themselves and their families by purchasing car insurance would be required to choose between two levels of No Fault PIP coverage:
- First, they could choose “a limit” on the “amount” of benefits they will be entitled to after a car accident, so long as the amount has been “agreed on by the insurer and the insured person.”
- Or, second, drivers could opt for “no maximum limit … on personal protection insurance benefits,” which appears to be the equivalent of the existing guarantee of unlimited No Fault benefits. (Page 45)
If the Lucido plan becomes law, what happens if an insured driver is at-fault in causing a car accident that injures an uninsured driver who elects to drive without insurance?
From the perspective of the insured driver (who was at-fault in causing a crash), not much will change from how Michigan’s auto law currently works today.
The insured at-fault driver who causes the crash will be protected by the No Fault law’s 40-year-old abolition of pure tort liability, and will not be responsible for medical bills, the first 3 years of wage loss, replacement services, vehicle damage, and other harms he or she would otherwise be responsible for in causing a car accident (currently, an at-fault negligent driver who causes a car accident is only subject to paying for personal injury and pain and suffering compensation when a crash victim can meet the “serious impairment of body function” threshold for suing for “noneconomic loss”).
But what happens to the uninsured but innocent driver who is injured in the crash?
From the perspective of the uninsured driver who is completely innocent and was injured, things won’t be so rosy.
Because of the No Fault law’s abolition of tort liability for a driver carrying insurance, the insured driver will largely be immune from having to pay any damages to the uninsured driver he injured as I explained above.
That means that the innocent, uninsured driver now can’t sue for any of the harms and losses that he or she suffers from the crash, such as all of the medical expenses, lost wages, replacement services, attendant care, etc. These are all things that in a pure tort liability state, the driver who causes the car accident and causes all the losses is also responsible for, but in Michigan the at-fault insured driver would still have tort immunity for the tens of thousands or hundreds of thousands of dollars in medical bills and other losses that he or she causes. The innocent party must now bear the full brunt of these costs.
And, only if he can successfully run the gauntlet of the Michigan auto accident serious impairment threshold law does he have the slightest chance of recovering for his pain and suffering.
How will the Lucido plan affect the MCCA and the benefits that it’s currently providing to catastrophically injured car accident victims?
A February 22, 2018, statement on the House Republicans website says the following about the impact of Lucido’s HB 5627 on the MCCA and on the benefits currently being provided to catastrophically injured car accident victims:
“Under Lucido’s proposal, those already catastrophically injured will continue receiving lifetime health care. Lucido said the Michigan Catastrophic Claims Association will remain funded by drivers who choose to continue with the option of buying auto insurance.”
A statement on the same day from a HB 5627 co-sponsor and fellow Macomb County politician, Rep. Steve Marino (R-Harrison Township), echoes Lucido’s sentiments:
“Those catastrophically injured will continue receiving lifetime health care benefits under the proposal. Drivers who choose to continue with the option of buying auto insurance will fund the Michigan Catastrophic Claims Association.”
Is liability coverage also affected by the Lucido plan?
Yes. It would no longer be required, nor would there be mandatory minimum policy limits.
Specifically, Michigan law would no longer read that drivers “shall maintain … residual liability insurance.”
Instead, under HB 5627, Michigan’s car insurance law would provide that drivers “may” get liability coverage. (Page 26)
Plus, the existing mandatory minimum liability policy limits of $20,000 (bodily injury or death of one person in one crash)/$40,000 (bodily injury or death to two or more persons in one car accident)/$10,000 (“injury to or destruction of property of others in any accident”) would be eliminated.
In the event that a driver opts to carry liability insurance, the policy “limit or combination of limits for bodily injury or death of 1 or more individuals or destruction of property” would be set at the amount “to which the insurer and the person insured agree.” (Page 17)