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Lawmakers have been pushing no-fault reforms on Michigan citizens for years under the guise of “saving money.” But when auto insurers support a plan like D-Insurance, you have to ask yourself, saving money for whom?
Detroit residents pay a lot for auto insurance. Auto insurers blame every thing from high traffic density to vehicle theft. But studies have shown that has more to do with your zip code and your credit score than your actual risk of an accident.
In 2016, Detroit Mayor Mike Duggan proposed a no-fault reform bill that he said would save city residents on their annual premiums. But instead of placing caps on premiums or controlling how auto insurers calculate costs, the plan put cuts squarely on the backs of the city’s disadvantaged citizens.
The bill, which is still pending in Lansing, would allow residents of Detroit and other urban areas to opt out of Michigan’s unlimited no-fault insurance. Instead, they would be required to carry a minimum of $25,000 in basic coverage and $250,000 in critical injury coverage. At those levels, catastrophically injured accident victims will quickly find themselves without the ongoing medical care they desperately need.
Now, Mayor Duggan has resumed his push for his D-Insurance plan, and this time, he has the auto insurers behind him. Their “common sense” reforms point the finger everywhere but at the insurance industry: to consumers, hospitals, and lobbyists. But those claims don’t hold up to scrutiny.
The industry suggests that people filing insurance claims should be required to prove they were injured in a car accident. They already do. The Michigan No-Fault Act only allows for recovery for injuries that are the result of using a motor vehicle as a motor vehicle. Auto insurers often defend against claims by saying a crash didn’t cause the injury at hand.
Insurers also push for limits on hospital premiums, similar to Workers Compensation schedules, but without the assurances of quick payment built in to that statute. That one-way negotiation would put medical providers out of business and leave Michigan motorists without the high-quality care they need.
Finally, insurers push for plans like D-Insurance, which allow motorists to choose their coverage level. But this ignores the reality of the road. No one knows if or when they will be in a life-changing car crash. A distracted driver or patch of black ice could send anyone to the emergency room. Opt-out strategies like D-Insurance encourage Michigan motorists to roll the dice and hope they aren’t the ones in the crash.
D-Insurance and other no-fault reforms like it don’t make sense for Michigan. Reforms should hold the insurance industry responsible for their premiums and assure protection for medical providers and motorists. Until they do, no-fault reform will remain no good for Michigan.