Current System Provides Necessary Care to Critically Injured
Auto insurance is something most people don’t like to think about, but if you are injured in a motor vehicle crash you want your benefits to be there when you need them. Michigan’s no-fault insurance system is perhaps the best in the nation for people injured in car crashes, particularly those who are catastrophically hurt. The current scheme provides payment or reimbursement for:
- All reasonable medical expenses related to the crash, including attendant care, home modifications, vehicle modifications, and more;
- Wage replacement for up to three years; and
- Replacement services for household chores for up to three years.
When auto insurance companies hold up their end of the deal and provide these benefits, much of the economic hardship of a motor vehicle crash can be mitigated. While the system isn’t perfect, those who need the benefits the most have access to necessary care and services.
Changes Proposed (Again)
Insurance companies get two major benefits out of this bargain. First, everyone who owns and drives a car in our state is required to buy auto insurance. Second, compensation for noneconomic damages (pain and suffering, for example), is limited to cases involving serious injuries or death. Now, led by Republicans and Detroit Mayor Mike Duggan, the auto insurance industry wants to have its cake and eat it too.
Under the proposed “reforms,” auto insurance companies can cap the benefits paid to injured crash victims at obscenely low amounts. Meanwhile, the insurance companies are making no significant concessions.
Lack of Transparency and Shifting the Cost to Consumers
The high cost of auto insurance premiums in Michigan, and particularly in Detroit, is often cited as the main reason for “reform.” But why are premiums so high? One reason is that auto insurance companies use non-driving factors, such as credit scores and gender, to set their rates. Another reason is that the Michigan Catastrophic Claims Association, the safety net designed to protect those who qualify for benefits but aren’t otherwise covered by insurance, has absolutely zero transparency or accountability. Basically, rates are high because insurance companies and the MCCA can make them high unless or until the legislature stops them. That would not change under the proposed “reforms.” What would change is that a tremendous health care burden will be shifted from auto insurance companies to Medicaid and Medicare and ultimately to taxpayers.
Insurance companies are trying to get out of a fair bargain by promising lower premiums. But all they are really proposing is reducing their responsibilities while shifting their burden to taxpayers.
Growing up in East Grand Rapids, Michigan, Nolan Erickson began working at Church Wyble PC in 2007 as a law clerk. Now as an attorney, Mr. Erickson has developed extensive experience with all phases of trial and pre-trial resolution of personal injury matters, including major auto accident, medical malpractice, and other serious injury cases.