Proposed Changes to Michigan No-Fault Law: What This Means For You

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Proposed Changes to Michigan No-Fault Law: What They Mean to Drivers

Michigan Legislature Seeks to Change Michigan No-Fault Law Once Again – But Would Rates Decrease?

The Michigan legislature is once again going to take another stab at altering the Michigan No-Fault Law. House Bill No. 4488 was introduced on April 19, 2017 by a Republican legislator. This newest bill, much like bills introduced in the past, reads like it was written by the insurance lobby for the car insurance industry. Like the house bills from previous legislative sessions, let’s hope it dies a quick and quiet death.

First, like prior attempts by the insurance lobby to “reform the Michigan No-Fault Law, this bill includes the so-called “PIP choice” provision. Under current law, Michigan car insurance carriers must provide for the payment of all medical charges related to the car accident. There is no dollar limitation and the benefits is for life. House Bill No. 4488 seeks to change this by allowing insurance carriers to write policies that cap the payment of medical expenses to $250,000. Although the bill allows for the selection of different caps, such as a $500,000 cap, $1,000,000 cap or no cap at all, the insurance lobby is well aware that most individuals will select the lower $250,000 cap.

Another major change is the bill limits the payment of attendant care, or personal care, by insurance carriers to 56 hours per week if the care is provided by a family member or friend who knew the injured person before the car accident.  Currently, family members and friends can provide attendant care and are entitled to compensation for their work without limitation. This provision seeks to end this, and the insurance lobby does this knowing full well that due to fear of getting stuck with the medical charges, most injured individuals and their families will not likely seek the help of home health aide companies for work above the 56 hour per week limit.

A third major change is the creation of a “Fraud and Theft Prevention Authority” that will be completely controlled by the insurance industry. This fraud authority would be created to fight insurance fraud committed by individuals and policyholders. The fraud unit would be made up of 15 members. According to the house bill, nine of those 15 members would be insurance company representatives, so the insurance industry would have complete control over the Authority. Two members would come from law enforcement agencies, one member would represent prosecuting attorneys and one member would represent “the general public.”

One can only imagine what would come out of this Fraud Authority. Given the makeup of the authority, the insurance industry would have carte balance to promulgate new rules and regulations in an attempt to prevent injured persons from collecting Michigan no-fault benefits.

What’s interesting is this fraud authority only goes in one direction. The house bill does not give individual policyholders or injured claimants a right to sue insurance companies for fraud committed by them.

In addition, this house bill does absolutely nothing to guarantee a decrease in automobile insurance premiums for Michigan drivers. There is no guarantee anywhere in the language of the bill that mandates car insurance carriers must decrease the large premiums they charge in return for the reduction in benefits Michigan car insurance carriers would pay out. Instead, what is guaranteed is Michigan car accident victims will have to fight even more and longer for their benefits.

The attorneys at the Lee Steinberg Law Firm, P.C. will monitor House Bill No. 4488 closely.