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Rep. Sheppard’s No-Fault Reform Bill is No Good

Michigan State Representative Jason Sheppard (R-Temperance) has introduced yet another no-fault reform bill. With its caps on coverage, the bill is no better than its predecessors at protecting Michigan motorists. That is to say, it’s no good.

House Bill 5951, introduced on September 22, 2016, is the next in a long line of Republican led attempts to force no-fault reform on Michigan motorists. Under the guise of “choice” this bill would deprive injured motorists of the care they so desperately need after a catastrophic accident, and shift the bill for that care to the consumer, and the tax payer.

Michigan No-Fault Protects Motorists from the Worst

The current Michigan No-Fault Act was written with one goal in mind: to make sure no Michigan resident would be buried under medical debt after an auto accident. Michigan offers the best auto insurance in the country: unlimited benefits for all reasonable and necessary medical expenses resulting from the accident.

This is accomplished through the Michigan Catastrophic Claims Association. This association creates a buffer, reimbursing insurance companies all no-fault benefits above $545,000 (adjusted annually). The MCCA ensures that, whether your medical bills come to $500,000 or $5 million, you won’t be facing bankruptcy because of someone else’s careless driving.

HB5951 Cuts Off Catastrophic Coverage

Under HB5951, Michigan motorists could choose their level of insurance:

  • $250,000
  • $500,000
  • $1,000,000 or
  • Unlimited coverage.

Motorists who choose the lower two tiers will have no access at all to the MCCA. Even with a $1 million policy, injured motorists will only be able to get a small portion of the coverage they have now.

The problem is that people buy insurance when they are healthy and safe. In an insurance agent’s office it is easy to say that you will never need that much coverage. According to the Coalition Protecting Auto No-Fault, research shows that most consumers would select the cheapest option. CPAN spokesman Josh Hovey told MLive.com:

“And since drivers don’t get to choose between getting into a fender bender or a serious accident, this bill will result in thousands of Michiganders being under-insured. The long term result will be that insurance companies shift their cost burden onto state programs like Medicaid, and we don’t think that’s the responsible thing to do for injured people or for state taxpayers.”

Sheppard Promises Cost Savings, But They’re Not Guaranteed

Sheppard is pitching his no-fault reform bill as a way to cost Michigan consumers money. But there’s nothing in the bill itself to make sure the industry keeps his promise. There is not one word about premiums in the bill. Consumers will be left to the good will of an industry that is already making a high profit off of its customers. Without a statutory guarantee of cost savings, there is nothing to keep the industry from hiking up rates for the new sub-par, cost limited plans.

David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. If you have been injured in a car crash, contact Christensen Law for a free consultation.

Image Source: GOPHouse.org