Posted on Sat, Dec 3, 2011 : 10:04 a.m.
Michigan 'no-fault' insurance coverage needs to be preserved
By Letters to the Editor
During over 20 years in the insurance industry, I have been on all sides of Michigan’s current No-Fault Personal Injury Protection (PIP) coverage, and my strong suggestion is it must be preserved, and moreover adopted as “best practice” throughout the country.
A few facts about the currently proposed legislation to “create options”:
- Consumers will forfeit unlimited medical coverage.
- The premium change will be something on the order of $11 per month per policyholder.
- This issue was soundly defeated in a statewide voter referendum in the early 1990s.
- A just released poll shows over 60% of consumers favor unlimited benefits.
- The current bill written by the Michigan Legislature is written to be "referendum proof," specifically so voters cannot bring it up for a vote (who knew that was even legal to do!).
- The "2500% increase in premiums over the last 12 years" becomes "23% over the last 19 years."
- One reason the fund is insolvent is that BILLIONS of surplus has been refunded to policyholders.
- No fault medical coverage, if forfeited, will lead to more and larger civil suits resulting from auto accidents...which will drive UP the cost of insurance.
- Many of those injured that require lifetime care will exceed their health coverage limits, go bankrupt, and end up in the taxpayer funded Medicaid system.
- Michigan insurance companies are among the most profitable in the industry.
The only reform warranted presently is to make PIP claims payable from the same cost guides that apply to Workers Compensation claims in Michigan. This will reduce fraud and waste in the system.
Tom Kussurelis, CPCU
Ann Arbor
Comments
walker101
Mon, Dec 5, 2011 : 2:38 p.m.
Typical insurance agent, how about the 40% of drivers who do not have auto insurance in and around Detroit. The cost is completely out of range for many drivers who do not earn enough money just to survive, this State is out of Control letting insurance companies dictate this type of insurance program that benefits the Insurance companies and not it's customers. Maybe if this agent was experienced the other side of normal auto insurance in other states he would see the difference.
Sallyxyz
Sun, Dec 4, 2011 : 8:06 p.m.
Other no fault states have the option of purchasing the medical part of the car insurance (PIP) at different levels of coverage. At the very least, this should be an option in Michigan.
Sallyxyz
Sun, Dec 4, 2011 : 8 p.m.
I agree with preserving the no-fault insurance in Michigan, but my rates each 6 months are increasing dramatically for auto insurance and I have no accidents, no tickets and no other changes that would warrant an increase in premiums. In discussions with my agent, it's the medical that driving the rates higher. I changed companies last year after a 20% increase over 2 years, again, with no changes on my part. Again this year, I have another 5% increase after 6 months. This is not sustainable. No one is addressing why the car insurance rates keep dramatically increasing due to out of control medical costs and ever increasing profits for the insurance companies! And I agree that the insurance lobbies are driving the entire process and getting fatter and fatter on the backs of drivers.
dswan
Sun, Dec 4, 2011 : 3:03 p.m.
Just curious...Can anyone have a letter published on AA.com, without bothering to cite sources? Please show me a recent source for the following assertion: "Michigan insurance companies are among the most profitable in the industry." Is it acceptable that hospitals charge workers comp claimants $760 for an MRI and auto injury claimants $2000? This gets passed on to insureds. There are elements of the bill that if enacted would secure the future of Michigan No Fault insurance indefinitely; unfortunately, they have all been lumped together in a bill that grossly reduces benefits. Hopefully our legislatures will see the difference and make changes; all or nothing won't work here.
pest
Sun, Dec 4, 2011 : 11 a.m.
No fault need to go! Do you realize how much more costly it is for insurance in MI due to no fault insurance vs other states? Do you realize that many insurance don't wan to do business in MI because of the no fault insurance? Do you realize "your" premiums will increase even if "you" are not at fault and the other driver is, due to the current no fault insurance? No fault insurance is a hindrance and an unnecessary expense.
josegaudet
Sun, Dec 4, 2011 : 5:01 a.m.
This could be ideal for someone who nobody wants to cover. It's an opportunity to get coverage subsidized by your fellow American. Learn more about it at "Penny Medical" online
Mike
Sun, Dec 4, 2011 : 1:23 a.m.
The solution to this problem is very simple. It is quite clear that Michigan voters do not support a change to the current law. It is also quite clear that monied interests are corruptly influencing the political process to go against the will of the people. If your representative votes for this bloody afterbirth of corrupt politics, then vote against them.
Halter
Sun, Dec 4, 2011 : 12:28 a.m.
The misinformed status of some of the comments here is just amazing...Before posting PLEASE do your research and look at facts. The No-Fault portion of your insurance is very small, and it doesn't make it the "most expensive in the country". The No-Fault portion of your monthly payment goes into the Catastrophic Fund. The reform bill is 100% driven by the Insurance Company lobby -- NOT by any person or organization other than the Insurance Companies. It's been in committee all fall, and is basically going nowhere fast. The Insurance companies do not want anyone to audit the PIP fund, because it will expose that all profit goes directly to the Insurance Companies. The most recent whip count indicates that there are now significantly INSUFFICIENT votes to pass this controversial "reform" bill...as your representatives have become better informed they have realized what this is all about -- Insurance Companies out for even greater profit at the ultimate cost to the consumer. Continue to write your representative and ask them to vote NO on this no-fault reform bill. Thank you for this excellent opinion piece Tom.
snapshot
Sun, Dec 4, 2011 : 3:51 a.m.
Halter, right back at ya. the no fault portion is 15% higher than similar states and liability and collision are 35% higher. No fault is a bad deal for everybody except those who are seriously disabled for life.
Polish Baby
Sat, Dec 3, 2011 : 10:13 p.m.
Under our current system, hospitals and health care providers are also raking in the profits. There isn't a cap or any agreed upon pricing for services like there is with medical insurance or work comp injuries. When you fill out a questionnaire in the ER, one of the questions is always if this is due to an auto accident. They charge tons more for the same procedures if they are needed due to an auto accident.
Jessie
Tue, Dec 6, 2011 : 8:17 p.m.
Yes, the amount that is paid by the insurance companies is negotiated. The charges billed by the hospital do not change. For example, a $1500 CT scan is always billed at $1500, no matter who is being billed for it. Insurance company A might pay $100 and the hospital writes off $1400, Insurance company B might pay $800 and the hospital writes off $700 of it, but the hospital's charge amount is always going to be $1500. THAT is what doesn't change.
dswan
Sun, Dec 4, 2011 : 3:12 p.m.
Jessie, Anyone that has bothered to look at their Explantion of Benefits statements can see that actual charges vary - Hospitals negotiate rates with BCBS that are much lower than what someone without BCBS would end up paying. Auto Insurance companies are not in the medical insurance business and don't get this advantage, the Auto Insurance companies, and ultimately Michigan drivers have to pay the full cost.
Jessie
Sun, Dec 4, 2011 : 12:52 a.m.
Hospital charges are not fluid based on a patient's insurance. The question is there so that the hospital knows which insurance to bill. It simply expedites the billing process. If the question was not there, and we billed your medical insurance, because you did not provide the necessary information, they would not pay your claim, and instead would ask you and the hospital for additional information regarding the cause of your injuries, since the diagnosis codes on your claim would indicate that you received injuries in an auto accident. If we don't have the information, we can't bill the right insurance, and if you don't provide the correct information in a timely manner, then you get the bill and is it your responsibility until you provide the correct information needed to get your claim paid.
Roadman
Sat, Dec 3, 2011 : 8:16 p.m.
Overall, the Michigan Catastrophic Claims Association does a respectable job in administering claims, but there are abuses on both sides - claimants and insurers. There are providers who have been held liable for fraudulent or excessive charges and there are insurers who have been sanctioned in court cases and administratively by the Insurance Commisioner for mishandling claims. The corect focus should be on the wrongdoers rather than the vast majority of claimants who benefit from a very generous system to get a comprehensive rehabilitation and recovery program implemented that would otherwise be sbject to restricted coverage under the current Medicaid or health insurance systems. Save the current No-Fault Act MCCA system!
snapshot
Sat, Dec 3, 2011 : 8:05 p.m.
"No Fault" insurance is terrible. It relieves reckless drivers of responsibility for their actions. No wonder drivers are so reckless here in Michigan......they have nothing to lose if their actions cause damage to another. We need "at fault" insurance laws. People need to be accountable for the accidents they cause.
snapshot
Sun, Dec 4, 2011 : 3:46 a.m.
Billy Bob, with "at fault" insurance you could sue the at fault driver's insurance company. In Michigan, you can't. The unlimited coverage gives the medical community a "blank check" to perform and provide unnecessary services. You argue the extreme as opposed to the norm. It "could" happen as opposed to what usually happens. And why is your drunk driver a "he"?
Billy Bob Schwartz
Sat, Dec 3, 2011 : 8:47 p.m.
Heaven help you if you are struck by one of these people you think are such terrible drivers in Michigan. Let's say you end up with a serious head injury. You were driving safely. You did nothing wrong. You were struck by a drunk driver. The fault was entirely his. So here you are, needing maybe $300,000 or more for the first year, and special nursing at you home for the next 50 years at maybe the same or higher dollar amount,, and you have no way to earn a living, and your family goes broke the first year or two, and your parents now have to declare bankruptcy and go on welfare. Etc. So now what do you do? If you don't have the unlimited life-time catastrophic insurance we now have under no fault, you will be lucky if you get medicaid and medicare, and you will be very poor, and you may not get even the basic care you need. This is just an example, but many innocent people have had this happen to them, and the no-fault insurance saves them. Don't think for a second that this can't happen to you. It can. I want the current no fault insurance to stay there so that this doesn't happen to anybody. It's bad enough to be so seriously injured and have to live such a hard life, but it's so much worse to live that life with no money and very little help. Keep no fault. Let the insurance companies find another way to make a ton of money.
Basic Bob
Sat, Dec 3, 2011 : 8:24 p.m.
No fault insurance is no risk for the insurance industry and guaranteed profits no matter who they insure. If you drive an old car it is really a bad deal if someone else runs into your car and totals it. You get next to nothing thanks to insurance friendly laws.
AlfaElan
Sat, Dec 3, 2011 : 7:03 p.m.
I think the current No faul insurance is good with one exception. The Catastrophics Claims fund is poorly managed. Because of the way the fund is managed is goes up on yearly with even going to refunds. It should be contracted out to a Re-Insurance company that is capable of managing it long term to keep the variations down. Last I check full coverage anywhere was not $24 a year. That would be ludicrous since it would not cover the cost of any repair of the vehicle. Oh you mean PLPD was $24 a year. Well last I priced that for one of my cars it was less than $250 a year including the the state mandated Catastrophic claims. Let see on our Focus SVT Not a cheap car since too many young boys crash them) it is $538 every 6 months. If I dropped the Property protection $290, the comprehensive covereage $44, and the collision $122 it would be less than $100 every size months. That is not outrageous for the coverage. The major charge will not be changed by the no fault change, so it won't effect me enough to give up the coverage. The current $81 for catastrophic claims is probably high for the long term since it has been as low as $17 and some years we have had an $80 rebate (including on the motorcycle I had at the time that was less to insure for a year).
Townie
Sat, Dec 3, 2011 : 6:01 p.m.
This says it all.. 2) Insurance companies will not let the state audit the PIP find to see if their claims are true about the fund's status. Why do your suppose they don't want the light shown there? Facts. Opps.
Davis
Sat, Dec 3, 2011 : 5:14 p.m.
if we didnt require auto insurance in michigan then our full coverage price could equal 24$ ayear , ie like alabama my father -in -law was killed by a young woman while his car was on the side of the road broke down walking back to his pu door 1 year ago ,2weeks after his 74th birth day , 1 week before christmas ,,, the insurance and law alowed the women to get away with murder , should have atleast been manslaughter ,,,caught her the year before drunk driving , found her in the bar 3 months after my father in laws murder , braging that she got away with it , her boyfriend left her that day ,,, smart man .. insurance only gave 20,000 too my mother in law,, weeeeee, big deal , they had to setle with there self ,, both had same insurance ,, what a crook, and why use credit scoreing thru equafax or any one else ,equafax is europe based and owned whos running this country????>??? Wake up people its time too stand and be the nation my father in law //Arnold // faught for korea and Nam - rip Arnold 1 year annaversay death dec.20 2010 ,dodged a bullet all these years to die from a young girl nawing on a chicken bone and texting ,,,
Roadman
Sat, Dec 3, 2011 : 8:06 p.m.
The $20,000 likely represented uninsured motorists or liability coverage at the statutory minimums. Personal injury protection coverage for out-of-pocket loss is generally unlimited for Michigan no fault policies.
psaume23
Sat, Dec 3, 2011 : 4:52 p.m.
Michigan's no-fault insurance coverage should not be preserved. Michigan insurance is the most expensive in the nation: <a href="http://michiganradio.org/post/michigan-auto-insurance-rates-among-nations-highest" rel='nofollow'>http://michiganradio.org/post/michigan-auto-insurance-rates-among-nations-highest</a> It is basically unfair to those who are responsible drivers with spotless records. As you indicated by your statement about Michigan insurance companies doing very well in the industry: We know who benefits from the no-fault insurance coverage, and it is not the consumer.
Sallyxyz
Mon, Dec 5, 2011 : 3:33 a.m.
You may have a spotless record today, but if some uninsured bozo runs a red light and broadsides you tomorrow at a high rate of speed, you will be thankful for your insurance.
Davis
Sat, Dec 3, 2011 : 5:31 p.m.
i agree if we dident require it,, it would be cheep enough for even the poor like me living in hillsdale moving from ypsilanti all i dodge now are deer friends n alabama pay $24.00 ayear full coverage , michigans stupied wake up!!!,, we need 2 raise taxs to fix roads ??? what happend to the money we already got robbed of for roads ,, stop letting them talk ya out of your hard earned dollars ,,funny the tax money just disapears when somthing is needed , lets get back to the beginning , NO TAXATION without repesentation ,,drop the insurance and start a change less demand equals cheep rates ,,,supply and demand
Edward R Murrow's Ghost
Sat, Dec 3, 2011 : 5:08 p.m.
Does not matter whether or not you have a spotless record. If you are catastrophically injured in an accident, whether your fault or not, if this coverage goes away, you either will be on the hook for a lifetime of care or, more likely, taxpayers will through Medicare. And, in both cases, you'll likely not receive the care you need. And none of this has anything to do with your driving record. Good Night and Good Luck
scole
Sat, Dec 3, 2011 : 3:29 p.m.
I agree that requiring families of severely injured crash victims to become destitute to take advantage of long-term medicaid benefits is terrible. However, your last point, that Michigan insurance companies are among the most profitable, may in fact be tied to the higher premiums paid due to the no-fault policies we are required to buy. I have lived in states without no-fault requirements, and there is no epidemic of people losing everything to take care of injured family members. There are just lower premiums for consumers - lower exponentially. We in Michigan were sold no-fault insurance as a way to cut back on lawsuits in the courts, but Geoffry Feiger, 1-800-CALL- SAM et al don't seem to be lacking for business. If anything, the cases between insurance companies have surged since no-fault auto has been required in the state, increasing court costs and administrative time. You won't find a bigger supporter of successful business than me, but this continuing gift to insurance companies has to end. This may help us stimulate the economy of our state more than any tax break we could imagine (just not the economy of insurance companies...sorry, you've had your time, the little guys need it right now).
Edward R Murrow's Ghost
Sat, Dec 3, 2011 : 4:06 p.m.
1) If insurance company profits are up, it is because they are charging too much for insurance given the benefits they are paying out. 2) Insurance companies will not let the state audit the PIP find to see if their claims are true about the fund's status 3) Fieger and Sam are cannot make money off of claims for medical expenses in auto accidents--there is nothing to sue for in that regard. They CAN make money suing for lost income, etc.... It is a completely different issue. 4) If this is such a "gift" to insurance companies, why are they lobbying so hard to end it? Good Night and Good Luck