Wednesday, March 13, 2013

Does Michigan Really Need No-Fault Reform?

There's been a lot of talk recently regarding the current state of automobile insurance in the State of Michigan.  I was listening to Rick Snyder's State of the State Address, and you could tell he is going try something new with no-fault reform.

In typical political fashion, he is supporting the billion dollar auto insurance industry at the expense of the very people that voted him into office.  As of now, when someone is injured seriously resulting from a car accident, the injured has no cap on medical expenses that will be needed for medical treatment and recovery.  If you haven't noticed, the United States has some high medical costs compared to the rest of the world and these costs add up very quickly.......especially for someone seriously in a car accident.  You probably get charged 5k before they even do anything to help you....obviously that's an exaggeration, but just an office visit can be well over $100 for an ear, nose, and throat doctor let alone a specialized surgeon.  

My ranting aside, there is absolutely no proof or evidence supporting the reform and gutting of Michigan no-fault law, and that's exactly what this will be...a gutting.  Many different groups have requested information from the insurance companies that claim that profits are diminishing and our current system is unsustainable into the future.  In order for any of their claims to hold any merit they need to back it up with data.  They have denied access and have been appealing a court decision which would make their meetings (MCCA) public.

To understand just how bad this will be, you need to know a little about no-fault in the first place.  Michigan is one of only a few states that utilize this system.  The premise of this law is that you give up some of your rights to sue the other driver, but in return you are able to easily collect your 1st party benefits which is essentially your medical bills.  The only way to gain 3rd party benefits(which is your sacrifice) is to prove that your injury passed a certain "injury threshold".  In other states which don't have no fault, there is no "threshold" so you are more easily able to collect those third party benefits.   For more information on how No-Fault Law works in Michigan, visit our auto accident page on our main website.

If we put a cap of $50,000 for injury protection, essentially the lawmakers are getting the best of both worlds at your expense!  They have severely limited your ability to file a 3rd party lawsuit while also limiting your ability to recover your once easily recoverable medical benefits or 1st party benefits.  If you're going to cap the unlimited personal injury protection, you are essentially dealing with something other than no-fault entirely, but the insurance companies don't want to know that.  Let's make them open up their books and let the truth dictate which way the State of Michigan should go with it's auto insurance policies....


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