No-Fault Auto Insurance Law May Change

By: Shannon Kantner Email
By: Shannon Kantner Email

Oil changes, tire rotation: steps to keep your car running as long as possible, and some think it's time the no-fault policy went into the shop, too.

"We think we've got one of the best systems in the country, but it's in need of some repair to make sure it's viable for the next 38 years," Insurance Institute of Michigan Executive Director Peter Kuhnmuench said.

The Insurance Institute has proposed reforms to the no fault system, including medical fee schedules and caps on medical benefits that would allow people to choose the level of coverage they want.

"We think these reforms will benefit everyone across the board, particularly those that find it hard to pay for auto insurance today," Kuhnmuench said.

Those against the changes argue rather than reform, the state should focus on what's already in place.

"It's the law. You have to be insured, but a lot of people are breaking the law," Coalition Protecting Auto No-Fault Spokesman John Truscott said. "One of the things we can do to help reduce costs is enforce the law that's on the books right now, and not allow the lawbreakers to go cause accidents. That drives up rates probably more than anything else."

Coalition Protecting Auto No-Fault is open to changes, but concerned for those people who depend on the unlimited lifetime benefits.

"We're all about trying to reduce insurance rates for drivers in Michigan, what we don't want to do is destroy the safety net that's there for people who have severe, traumatic brain injuries," Truscott said.

Insurance Institute said Governor Snyder has shown support for the proposed reforms, and it might even be a topic at the State of the State address. Now they need to reach the lawmakers.

"Our challenge is to convince the legislature that this the right thing to do, and that this is the time to do it," Kuhnmuench said.

The governor's office couldn't be reached for comment.

Insurance Institute has been advocating for reform for almost a decade. They're also proposing a Michigan Auto Insurance Fraud Authority that would grant funds to law enforcement and prosecutors throughout the state to help pursue auto insurance fraud criminals.

Fraud brings up everyone's premiums, no matter who's committing it and where it's happening. Experts said crimes in Detroit can effect every Michigander's auto insurance.

The Fraud Authority is reform that both sides can largely agree on.

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  • by s Location: lansing on Jan 24, 2013 at 12:50 PM
    Caps on benefits is not the answer. Fee schedules is what is needed. Towing of uninsured cars and having them impounded is needed. Rates realy are not going to change that much. Companies already know what their exposure is with medical. It is capped for the company at 450,000 any benfits after that are paid out of the MCCA. The MCCA needs to be transparent with public access to all audits of the program. We need a insurance commisioner with a pair. Companies are really running over the consumer and our commisioner does nothing. But as we all know the clowns in Lansing will follow the $
  • by Name Location: Location on Jan 23, 2013 at 08:25 AM
    Grantheft really stuck it to us on that unlimited lifetime attendant care law. But the whole PL/PD thing needs a lot of reform too. It used to be that PL/PD was the cheap part and if you wanted collision you had to put a prybar on your wallet. Now collision is the bargain considering the minimums they force on us just to put some beater on the road legally!
  • by L Location: central michigan on Jan 22, 2013 at 07:31 PM
    Yes in a sense. The hospitals charge 400%-500% higher for a procedure when they know it is going to be billed to an auto insurance company. They say they do this because otherwise they wouldnt make any money because of ppl not paying their bills. That is why it needs to be schedules like health insurance companies and workmans comp. Otherwise its just going to keep climbing. Http:// this is a good site for information.
  • by Heywood Location: Location on Jan 22, 2013 at 06:12 AM
    Gee, L... you mean like when we get calls from a collections agency seeking payment for our hospital bills for a birth (because no SS# yet and yada yada) in the amount of $780-some bucks. Call the insurance company to make sure it'll be handled and they tell us "yes it will, but be glad they're not asking you for the amount PHP was billed" which was $2500 Is that whay you mean???
  • by L on Jan 21, 2013 at 04:49 PM
    I am an insurance agent. You ppl are talking about things you know nothing about. The insurance companies dont make money when the prices are too high for ppl to pay because no one gets insurance. If they were able to lower the cost of insuring someone then they would make more money. Currently, insurance companies are losing money on auto insurance in michigan. For every dollar made some are losing $6/$1 made. This reform needs to happen. We need a fee schedule for the hospitals so they stop charging 400%-500% more $$ to the insurance companies.
  • by Heywood Location: Location on Jan 18, 2013 at 02:53 AM
    If some of you would spend any time out on the road to see who it is that's in all these accidents, you'd be able to see that its not some young punk "joyriders" who are causing the accidents. Instead, its "safe, cautious, and courteous" drivers such as what YOU claim to be who just so happen to look down at their cell phone for a tad bit too long! God gave your finger just enough knuckles so that when you point it, it'll also be able to bend enough to point right back at yourself!
  • by M.P. Location: Stockbridge on Jan 17, 2013 at 05:40 PM
    To Mr. Truscott, you can defend your position all you want but you haven't been doing your job by accurately comparing the numbers that don't lie. Firstly, insurance rates are ridiculous for the average American. Most of these folks don't want to break the law but are just trying to make a living to pay for food and shelter. If you compare numbers, you will see that most employed uninsured drivers are also very careful with driving so that they can continue getting to work. Most that I have talked to have perfect driving records like myself.If you enforce this already broken system, the uninsured drivers that are slapped with driver responsibility fees on top of higher rates will either choose to depend on friends or public transportation This limits job growth and opportunity and will not buy your insurance. The ones that do get into accidents, usually young joyriders that can't afford insurance either, will increase rates so that they won't be able to afford it until they are well out of college at around the age of 30. that's probably after your retirement age. The ones who can barely afford insurance will find ulterior methods because now the rates are too high for them also. I know that you need a job and higher rates may keep you employed for a little while but at the rate you are going, it won''t be for long. Also, all of the people you are putting out of work with this method will no doubt need state assistance and so you won't be able to depend on the amount of social security you were suppose to get when you do retire. Not very smart if you ask the majority, really. You would make more money for yourself by offering to take the thousands to work that already can't afford the tiny bit of coverage that you give them now at these rates, mister. Maybe you should hire a new research analyst before you are out of work and security and find out the hard way what life is really like for the average person under these great plans that are in place right now!,
  • by Anonymous on Jan 17, 2013 at 09:26 AM
    Don't give us that it's too expensive for insurance companies and that they can't make money. Watch the ad on TV AIG insurance and listen they tell you that after getting bailed out by the gov. they made 20 BILLION in profit last year. That's after what they say is giving away 100's of millions to help people on top of what they paid out in claims. This is a way for insurance companies to make a larger profit here in Michigan.
  • by Heywood Location: Location on Jan 17, 2013 at 07:17 AM
    So Sherry... did any of the massive increases under Grantheft's reign of terror go to lining her pockets or is this just a republican thing?
  • by Sherry Location: Michigan on Jan 16, 2013 at 07:18 PM
    If anyone really thinks the insurance companies are going to lower rates even $1 I have a bridge in Northern MI for sale. This is nothing more than another way to line Snyders business buddies pockets more.
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