The Michigan House of Representatives is considering a no fault reform bill that will establish a statewide Fraud Authority to help prosecute people trying to pass off phony insurance. But the authority only goes one way: protecting insurance companies but not the consumers who buy from them.
The Michigan no fault reform bill is no good for state motorists. It cuts benefits, caps insurance company liability, and puts the risk of mismanaged state funds on the backs of our most seriously injured drivers. As if that weren’t enough, it also creates a Fraud Authority that could crackdown on consumers who possess faulty insurance, instead of the companies who sell it to them.
Michigan Automobile Fraud Authority
Senate Bill 248 establishes the “Michigan Automobile Insurance Fraud Authority.” This authority will be headed by a 15 member board of directors eight of whom represent auto insurers, five of whom are in law enforcement, and one of whom is a consumer. That means that even if every lawyer, cop, and consumer on that board disagreed with something the insurers wanted to do, they would still be outvoted.
What the Fraud Authority Can Do
The Fraud Authority’s primary goal will be to create programs to stop individuals from lying to insurance companies to get fake benefits. It will work hand in hand with insurance providers to create statistics regarding auto insurance fraud across the state. It will use the money it fundraises from those same insurance providers to assist law enforcement and prosecutors in cracking down on incidents of fraud.
What the Fraud Authority Can’t Do
Auto insurance companies today do everything they can to keep from paying benefits to their customers. They pay “independent” doctors to tell them patients do not need treatment or have reached their full recovery. They draw out lawsuits to the brink of trial before agreeing to reasonable settlements. And they try to cut out any treatment that they might not have recommended themselves.
All of these tactics are a form of fraud against the consumer. But the Fraud Authority won’t have the power, or the motivation, to investigate these behaviors. Nothing in the no fault reform bill will give the Fraud Authority the power to review industry practices or set minimum expectations for the industry. Nor would it if it could, since over half the board gets paid through these deceptive practices.
The Michigan no fault reform’s Fraud Authority is a one-way street that protects the auto insurance industry at the expense of consumer protection. It gives auto insurers more power and more control over the system and does nothing to remove the barriers the industry has put between its consumers and their benefits.
The Michigan House of Representatives will vote on this bill soon. If you believe that fraud protections should go both ways, CALL YOUR REPRESENTATIVE NOW and ask them to vote no on SB 248 and 249.
David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. He represents injured motorists against the insurance companies and help them get the benefits they deserve. If you or someone you know have been seriously injured in a car crash, contact Christensen Law today for a free consultation.