What You Need to Know About Michigan's Auto Insurance Policies

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Michigan's no-fault auto insurance law, which provides broad and unlimited coverage of medical expenses to persons injured in motor vehicle accidents, is under attack again by the powerful insurance industry. 

While insurance companies continue to charge unreasonably high insurance premiums to Michigan motorists, they have refused to justify those charges except to claim that benefits under the Michigan no-fault law are too generous. 

Ironically, the insurance industry originally pushed for Michigan’s no-fault system in the 1970s. Under this system, insurance companies promised that injured motorists would receive all necessary medical coverage and wage loss protection. In exchange, motorists wouldn’t be able to sue at-fault drivers for paying those same benefits. Insurance companies argued this was a cost saving plan which, indeed, led to higher profits.

As medical expenses continue to increase, the insurance industry is looking to change the system yet again.

Hoping the Republican majority in Michigan’s House and Senate would give them an edge, auto insurance lobbyists recently introduced House Bill 5013. The bill would have shifted the cost of taking care of injured motor vehicle accident victims to taxpayers and away from the insurance companies.

The insurance industry claimed this bill would provide "guaranteed rate reductions" when, in fact, it would have allowed insurance companies to ask the Insurance Commissioner to invalidate rate reductions at any time the insurance companies felt that they were not making as much money as they would like.


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The bill also failed to specify how lower rates would be accomplished without shifting responsibility for medical care costs to the taxpayers. The plan was clever in that it shifted expenses from the insurance company's responsibility to government provided (read: taxpayer-funded) plans like Medicaid.

On November 2, the bill was defeated in the Michigan House. Even the Republican legislature recognized that this was a giveaway to insurance companies and would shift the burden of medical expenses to taxpayers.

There are currently other bills being discussed to reform the no-fault law that wouldn’t impact taxpayers. Not only would these bills continue to provide unlimited medical treatment to accident victims, but it would provide Michigan’s motor vehicle owners with rate relief.

The bipartisan supported "Fair and Affordable No-Fault Reform" legislation House Bills 5101 – 5111 include medical cost-containment requirements, bans on unfair auto insurance rating practices, and fraud prevention measures. The bills are supported by The Coalition Protecting Auto No-Fault (CPAN), consisting of 15 major medical groups and 11 consumer groups whose primary mission is hold Michigan insurance companies accountable for paying lifetime medical and rehabilitation expenses.

If you want to learn more about the "Fair and Affordable No-Fault Reform" legislation proposed by CPAN, click here: http://protectnofault.org/2017/10/17/new-legislation-will-make-michigan-auto-insurance-more-fair-and-affordable/

As attorneys who specialize in auto accident cases, we see firsthand how auto insurance companies work against Michigan motorists. Their lobbyists are working nonstop to take away your benefits with illusory rate reduction. We encourage you to educate yourself on the issue and stay vigilant. Contact your state representative and express your opinion. Motorists deserve lower rates and continued coverage, but not at the cost of the Michigan taxpayer.

 

Alexandra Nowlin