Auto insurance: No-fault no-reform
Dan Calabrese / The Michigan View.com
Published: Nov 3, 2011
Michigan’s no-fault auto insurance system is very unpopular. With the insurance industry, that is.
Whereas they can sell policies of defined, limited benefit amounts in other states, they are required by law in Michigan to sell everyone policies that cover unlimited lifetime medical benefits in the event they suffer catastrophic injuries in an auto accident.
The system – or at least one aspect of it – is unpopular with another group of people, and that is a certain subset of accident victims. They don’t like it because, when insurance companies try to deny claims for various and sundry reasons, the accident victims’ only recourse by law is to go to court. The insurers and their clients spend way too much time in Michigan courts fighting over benefits, because an insurance policy is a private contract, and the only way to enforce the terms of a contract is civil action.
So if you’ve got a massive head injury and can’t work – but the insurance company’s doctor says you’re just fine and don’t need any more treatment – you need to hire your own attorney and take on the insurance company lawyers.
There is a lot wrong with Michigan’s no-fault insurance law. But it’s hard to see how the reform proposal being championed by State Rep. Peter Lund (R-Shelby Township) solves any of them. Lund appears to accept the argument of the Insurance Institute of Michigan that lifetime benefits have caused costs to spin out of control. So Lund proposes to do away with unlimited lifetime benefits, and instead to give consumers a choice of three levels of coverage – $500,000, $1 million or $5 million.
