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 Lee Steinberg Law Firm, 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.