Proposed No-Fault Insurance (What The Insurance Industry Does Not Want You To Know)

18 March 2014
Comments: Comments Off on Proposed No-Fault Insurance (What The Insurance Industry Does Not Want You To Know)
18 March 2014, Comments: Comments Off on Proposed No-Fault Insurance (What The Insurance Industry Does Not Want You To Know)

According to the Michigan Department of Transportation, “approximately 14,000 Michigan motorists experience an automobile accident per year.” Tragically, many of those motorists suffer major accidents that either seriously or permanently damage bodily functions or cause death. With this in mind, Michigan lawmakers for the past year (and quite frankly, the last decade) have attempted to reform the current No-Fault Insurance laws, drawing the ire of many personal injury attorneys. Here are the major points for the No-Fault reform:

  • $10 Million Cap for Medical and Rehabilitation Benefits

Currently, No-Fault automatically provides coverage for unlimited lifetime medical and    rehabilitation             benefits; however, the reform will stop automatic coverage for        unlimited medical and rehabilitation and cap benefits to a maximum of $10 million                  dollars.  In addition, rehabilitation would be limited to 52 weeks with an option to extend          for another 52 weeks. Consider how absurd this is for a moment, in which those    motorists who require physical therapy for many      years following a significant accident            are restricted to 104 weeks.

  • $50,000 coverage Low-Income Residents

The most controversial of the reform provides that individuals who earn $15,000 dollars or less in a year can purchase a low-cost policy; however, medical coverage is capped at $50,000 dollars regardless of the injury.   Of course for the catastrophically or brain injured “low earning” motorist, they would be left without medical insurance after about a week in the hospital.

  • 10% Savings on Premiums for the First Two Years

Michigan ranks as the second-highest in the United States for No-Fault premiums. The 10% savings for two years or $125 per year would still keep Michigan in the upper echelon for premiums nationwide; but, lawmakers believe this will provide enough incentive for Michigan motorists not to abandon their insurance policies.

The rumblings from various metro-Detroit officials and personal injury attorneys alike grow stronger as Michigan lawmakers continue to move forward in their efforts to reform No-Fault Insurance. Granted only 10% of all motorists per year suffer non-minor accidents, this reform will severely impinge benefits those motorists whom either sustain serious injuries or are poverty-stricken. Clearly, the goal of this proposed legislation is to increase profits for insurance companies, not reducing driver’s premiums as advertised.

By: Fahd Haque, Law Clerk for Moss & Colella, P.C. If you have any questions, email: Fahd Haque at FHaque@mosscolella.com