Michigan Insurance Lobby Seeks to Destroy Michigan No-Fault Law Once Again

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Michigan Insurance Lobby Seeks to Destroy Michigan No-Fault Law Once Again

The Michigan legislature is at it again. A package of bills are working their way through the Michigan legislature that would drastically cut Michigan no-fault benefits and only fatten the already huge pockets of the car insurance companies.

After quickly and quietly passing the state Senate on a floor vote this week, House Bill No. 4224 was instantly introduced to the state house. The bill seeks to move a huge portion of no-fault claims to the Michigan Assigned Claims Plan and then put a $275,000 cap on benefits for those claims. Effectively, the bill would destroy the present no-fault system.

Michigan car insurance companies are responsible for paying the economic losses when a car accident occurs. This includes the payment for lost wages for 3 years and the payment of all medical bills related to the accident. Presently, there is no dollar limit or time limitation for the payment of medical expenses. So long as medical treatment – whether its physical therapy or hospital bills – is related to the accident, the no-fault car insurance company must pay the medical bills for life.

Republican legislators and their insurance benefactors have been trying for years to “reform” the Michigan no-fault law by placing caps on the payment of medical expenses and other benefits. HB 4224 appears to be latest reincarnation of this insurance giveaway.

The proposal is 24 pages and contains a huge array of insurance company giveaways. First, it destroys the present “order of priority” for no-fault claims and moves individuals injured in a car accident that do not have car insurance in the household to the Michigan Assigned Claims Plan.

The MACP is an organization controlled by the insurance industry that is supposed to assign PIP claims to participating insurance companies (State Farm, Allstate, etc.) for the quick payment of no-fault claims. Instead, the MACP has turned into a bureaucratic insurance nightmare that actively and intentionally delays the assignment of valid no-fault claims.

If enacted, many injured people will have to go through the Assigned Claims Plan and follow its rules and policies. These policies include completing a complicated and onerous application as well as providing various documents about car insurance, car ownership, residency and other things that often have little to do with the underlying accident.

Then once in the Assigned Claims Plan, they will only have $275,000 in PIP coverage, despite the fact other individuals will have no such limitation.

HB 4224 also gives auto insurance companies the following:

  • A $275,000 cap on all benefits for out-of-state residents eligible for no-fault benefits. Currently, there is no cap.
  • Non-residents injured in Michigan would have a $275,000 cap on no-fault benefits. The current cap is $500,000.
  • Injured people forced to go through the Michigan Assigned Claims Plan “has the burden of proving that he or she is entitled to the benefits being claimed.” This requirement will be used as a blunt object by the MACP and its member insurance companies to deny claims.

What’s also amazing about HB 4224 is the fact that in return for giving up all these benefits, there is no guarantee by car insurance companies that they will lower insurance rates. Not even for one year. So car insurance companies get all the benefits but give nothing in return.

Instead, the severally and catastrophically injured will be forced to turn to Medicare and Medicaid for the payment of no-fault benefits, thereby putting the Michigan taxpayer on the hook.

This piece of legislation, and others like it introduced over the past few years, makes a mockery of the present car insurance system. The Law Offices of Lee Steinberg, P.C. will continue to follow this story and fight the insurance companies in their latest attempt to change the rules and destroy the Michigan no-fault system.

About the Author:

Eric joined the Law Offices of Lee Steinberg, P.C to fight for injury victims throughout Michigan. He has been selected to Super Lawyers and is a member of the National Trial Lawyers Top 40 Under 40. A graduate of the Chicago-Kent College of Law, he devotes 100% of his practice to representing victims who have been injured by the negligence of others. He is on the Executive Board for the Michigan Association for Justice.


  1. andrew coombes October 24, 2016 at 8:11 am - Reply

    My wife suffered injuries when she was rear ended at some traffic lights. I am from the UK and was amazed at how quickly her insurance company denied her claim. After contacting a lawyer to argue the claim, she found herself in court with her entire medical history on display to anyone who wants to look. She LOST the trial and now faces a$80k plus bill from Auto Owners plus $80k medical bills. It seems that insurance companies are willing to take the chance to spend as much money on defending a claim than spending it on the claimant. Ad a foreigner I found the whole process completely bizarre.
    My wife is still receiving treatment for injuries she apparently didn’t get get from being rear ended. Her life has been destroyed by injury lawyers and insurance company and consequently, so is mine. Meanwhile, the kid who rear ended her is still driving around in daddies new truck free of consequences. Well done Auto Owners. And 855 Mike Loses.

  2. Robert corbin May 17, 2017 at 11:06 am - Reply

    I have not had a ticket, accident, or insurance claim since I was 19, I am 64. I drive a Nissan versa and am retired. When current insurance was raised, I shopped. Now remember, here is a guy where the risk can’t get lower, why should new rates for me be $460 a month, same coverage in Indiana is $109 a month.
    I also find out if I just park the car and cancel insurance, they charge a 1500 fee if you don’t have continuous coverage. Agents said I should buy car insurance weather I own a car or not. Twlight zone time? I also found out it’s illegal to sue a insurance company in Michigan!!! If I could buy the Michigan legislation and get a law passed saying I could never be sued, I could be as criminal as Michigan car insurance companies. I also don’t believe they face the risk they say they do. Statistics don’t lie, but liars use statistics. We need a total recall of everyone in Michigan government between car insurance and the Flint water, they should all be in jail

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