Michigan’s no-fault insurance reform, good for insurers, bad for accident victims
New No-Fault Laws Help Insurers, Not Crash Victims
In Michigan, drivers injured in automobile accidents have been able to receive lifetime benefits for their injuries regardless of who was at fault for the accident. Insurance reform has been a hot topic of late and proponents of reform seem to have made gains in a recently proposed Senate bill, SB 251. The bill seeks to eliminate uncapped medical benefits for motor vehicle accident victims and dissolve the association that funds these benefits.
Michigan PIP benefits and proposed changes
Currently Michigan gives complete medical benefits to drivers injured in car accidents. It is not the only state that provides personal injury protection (PIP) to accident victims. However, it is the only state that gives limitless lifelong medical benefits. These uncapped benefits provide the lasting care necessary for some injuries that victims would not be able to pay for otherwise.
Reforms proposed by Senate Bill 251 would put a $50,000 cap on PIP benefits if passed. Lifetime benefits would also be a thing of the past. Supporters of the bill say that it is necessary to reduce inflated automobile insurance costs and cites the lifetime PIP benefit payments as a main cause of growing premiums in the state.
In addition, the proposed reforms would dissolve the Michigan Catastrophic Claims Association (MCCA). MCCA is a reinsurance agency that pays PIP claims over a certain amount ($500,000). Insurers pay $175 per-car to finance the association, which is recouped by charging those insured more for their policies. The bill seeks to eliminate the increased premiums and reduce insurance costs when insurers no longer have to pay the MCCA fees.
Impact on accident victims
If passed, the reform measures would mean reduced protections for drivers injured in car collisions. The most alarming result of the loss of uncapped PIP benefits would be that injured accident victims would no longer be able to afford necessary medical care. This would shift the burden of expensive medical costs to families of injured victims and taxpayers through Medicare and Medicaid. Likewise, those employed by the health care industry would feel the impact by fewer available jobs. In addition, there is no guarantee that the insurance industry will reduce premiums when the MCCA fee has been eliminated. This could result in a loss of legal protections for accident victims and higher costs for Michigan taxpayers.
In the past, MI lawmakers have proposed no-fault insurance reform bills aimed at restricting who could receive uncapped PIP benefits and allowing insured drivers to select the amount of PIP coverage for a lower cost and lesser amount of benefits. These previous reform proposals did not pass. The outcome of proposed Senate Bill 251 still remains unclear, but the possible consequences to those injured in automobile accidents are a cause for concern.
If you have questions about no-fault insurance reforms and how they could impact medical benefits for car accident victims, speak to an experienced personal injury attorney to learn more.