CPAN testifies on the dangers of implementing limited protection coverage policies

CPAN testifies on the dangers of implementing limited protection coverage policies

Kroese: Limited protections means accident victims, including children, won’t get the care they need

LANSING, Mich.—(Feb. 27, 2019)— Two representatives from the Coalition Protecting Auto No-Fault Board of Directors, Margaret Kroese and Steve Sinas, today testified in front of the Senate Insurance and Banking Committee on the dangers of enacting limited protection coverage auto insurance plans – otherwise known as Personal Injury Protection (PIP) choice. The following statement can be attributed to Kroese, who is the executive director of neurorehabilitation at Hope Network.

“Limited protection coverage means that catastrophically injured auto accident victims – including children – won’t get the essential care they need. That outcome is guaranteed in any proposal that includes so-called PIP choice. This is a ‘solution’ that will only create more problems.”

“According to the Michigan Office of Highway Safety Planning, of the almost 10 million people living in Michigan in 2017, 78,394 were injured in a car crash, or one out of every 127. Over six thousand people needed hospitalization – their injuries were severe. Some of those injured were left with permanent disabilities.”

“I believe there is a better, simpler way to bring down costs without taking away the coverage.  The proposals put forward by CPAN offer efficiencies to the current system. They include a fee schedule, reduction in litigation, elimination of non-driving rating factors, cracking down on fraud throughout the system, and increased oversight on rate setting.”

“California, which has the strongest consumer protections in the country, has seen the slowest premium growth in the country, thanks to enacting exactly the kinds of reforms that CPAN has advocated for. To argue that CPAN’s proposed reforms won’t lead to rate reduction misses this important proven result in California.”

“These wide sweeping reforms will result in substantial saving to policyholders across the state without forcing families into bankruptcy, shifting the cost of care onto the back of taxpayers (as we’ve seen in other states like Colorado which saw a 205% increase in Medicaid costs associated with just care related to motor vehicle accidents when they ended no-fault), or depriving accident victims of the care they need to recover as much as they can and to live as independently as possible.”

CPAN welcomes new DIFS Director Fox, calls for new era of stronger consumer protections and regulation of insurance industry

CPAN welcomes new DIFS Director Fox, calls for new era of stronger consumer protections and regulation of insurance industry

FOIA records show former Director McPharlin was too cozy with insurance companies

LANSING, Mich.—(Jan. 14, 2019)—The Coalition Protecting Auto No-Fault today welcomed Anita Fox into her new role as director of the Department of Insurance and Financial Services, and called on her to reform the department into one that protects the interests of consumers rather than the insurance industry.

Today, Fox officially replaces outgoing director Patrick McPharlin, who had a cozy and secretive relationship with the industry he was supposed to be policing, according to records obtained by CPAN through the Freedom of Information Act.

“CPAN looks forward to working with Director Fox to make auto insurance more affordable while protecting the benefits that catastrophically injured auto accident victims need to lead productive, meaningful lives,” said John Cornack, president of CPAN. “For too long, no one has held Michigan’s insurance companies accountable. Michigan consumers need a bulldog in state government to protect them from the insurance industry’s discriminatory practices – instead, Patrick McPharlin was a lap dog for the big insurance companies.”

Documents that CPAN recently obtained through a Freedom of Information Act request relate to the DIFS “President’s Council” – a group of insurance company CEOs who regularly met with McPharlin. Only emails and meeting agendas were made available through the FOIA – no minutes of President’s Council meetings exist, although it’s clear that issues relevant to the public were discussed.

For example, an agenda item for Jan. 28, 2016 was titled “Make Michigan theinsurance industry state.” In letters sent to each insurance company CEO invited to sit on the Council, McPharlin said he wanted to hear about “laws we need to enact, repeal, or modify” to make the CEOs happy.

In a letter to State Rep. Donna Lasinski, McPharlin confirmed that the issue of tax reform was discussed at one of the President’s Council meetings. CPAN, Rep. Lasinski and other consumer advocates in the Michigan Legislature have called on DIFS to take a more proactive approach in ensuring that the insurance industry pass along to consumers the massive windfall they received as part of federal tax reform enacted in 2017. While no minutes exist from the meeting, DIFS clearly opted not to crack down on insurance companies, which have continued to rake in huge profits while jacking up prices on consumers. For example, during the first nine months of 2018, Allstate, ranked in the top 5 for market share in Michigan, increased its Adjusted Net Income by $716 million over the same time period in 2017.

Cornack noted that a recent poll commissioned by CPAN found that 65 percent of respondents said auto insurance rates are high because the State of Michigan does a poor job regulating rates to protect consumers.

“With stronger oversight from state government and a new opportunity for bipartisan solutions in the Legislature, we hope that 2019 will represent a new era—one where we put the needs of consumers above the profits of big insurance companies,” he said. “We are encouraged that we can work together to find a solution that lowers insurance premiums while protecting benefits for all Michigan drivers and families.”

The Top Five Things Mike Duggan and Tom Leonard Don’t Want You to Know about their Auto Insurance Bill

Vote No on HB 5013

LANSING – The House Insurance Committee just voted to move legislation forward that would have dramatic and draconian effects on Michigan auto insurance system. House Bill 5013, sponsored by Rep. Lana Theis (R-Brighton), is being pushed by Detroit Mayor Mike Duggan and House Speaker Tom Leonard. The bill would make significant changes to Michigan’s auto insurance system by setting stringent caps on medical coverage, taking away legal rights from Michigan auto accident victims, imposing unsustainable fee schedules on health care providers and shifting costs to Michigan taxpayers.

The House Insurance Committee passed the bill on a 9-5 vote, with two legislators passing. In response to today’s events, Coalition Protecting Auto No-Fault President John Cornack issued the following statement:

“The number of problems with this bill could be stacked as high as the Capitol dome. There are ways to reduce Michigan’s auto insurance rates and improve the system without destroying it. Unfortunately, this bill’s supporters would rather sweep the criticisms under the rug so that they can rush forward with a vote rather than working on a comprehensive, long-lasting solution.”

Here are the top five facts about the Duggan-Leonard no-fault bill that its supporters don’t want to talk about:

1) The Cap on Care is $25,000 NOT $250,000
Contrary to statements made by the bill’s supporters, the $250,000 cap proposed in the bill only provides $225,000 in emergency care. Once the patient is stabilized the cap drops to $25,000 for all non-emergency and post-acute medical needs.

While supporters of HB 5013 will contend that accident victims will be able to rely on traditional health insurance or Medicaid, these insurance plans do not provide for many of the rehabilitative services needed by serious auto accident victims.

In addition, many of the very backers of HB 5013 are the same politicians who opposed the expansion of Medicaid through the Affordable Care Act.

2) HB 5013 is a Tax Increase for the Entire State
Because many seriously injured drivers will have capped care, the House Fiscal Agency Analysis predicts a massive cost shift to state taxpayers. Once an accident victim exceeds the cap, they will ultimately need to rely on Medicaid for their care. As a result, it is estimated that Michigan taxpayers will see a $10 million increase in the first year the bill goes into effect with costs rising to $150 million per year after 10 years.

3) HB 5013 Punishes Children
Under Michigan’s current law, virtually all Michigan children involved in an auto accident – even those whose parents fail to purchase auto insurance – receive lifetime coverage for their injuries. Under HB 5013, children will be subject to the coverage limits their parents purchase. This could leave a catastrophically injured child with just $25,000 in care to meet their needs for the rest of their life.

4) Shields Insurance Companies and Agents from Lawsuits
The legislation virtually eliminates a patient’s right to sue an insurance company due to the chilling effect that strengthened legal powers granted to insurers under this bill. HB 5013 includes language that requires patients to pay insurance company attorney fees and court costs if the benefits in question were found to be “not medically necessary” as opposed to “reasonably necessary,” as is stated under the current law. The phrase “medically necessary” has a very strict legal definition that essentially refers only to life-sustaining care.

In addition, insurance agents who fail to accurately inform consumers of the limitations of their insurance coverage are completely immune from any civil liability for their actions. This places all responsibility on the consumer to understand the complexities of Michigan’s auto insurance laws and zero responsibility on the agent who sells the policy.

5) Unprecedented Immunity for At-Fault Drivers
Unlike other no-fault states that cap care, HB 5013 would make Michigan the only state in the nation that makes reckless, drunk or otherwise negligent drivers immune from being sued for unpaid medical expenses. This immunity problem does not exist under the current law because the accident victim’s medical expenses are not capped.

Cornack notes that any no-fault reform package passed by the legislature must include a ban on the use of unfair rating practices that allow insurers to charge higher rates based on non-driving factors like gender, job title and credit score. That is why CPAN is supporting the Fair and Affordable No-Fault Reform package.

Learn more about the impacts of HB 5013 by reading CPAN’s legislative analysis.


Catastrophic Accident Survivor Brian Woodward Talks No-Fault Reform

Detroit resident Brian Woodward was catastrophically injured 30-plus years ago in an auto accident. Listen to him share what his life would be like if he would have purchased an auto insurance policy with a $250,000 cap such as the Duggan/Leonard PIP Cap Plan plan (HB 5013) being discussed in the House Insurance Committee Hearing tomorrow.

Click below to listen to his interview on the Mildred Gaddis Show, WPZR 102.7 FM.

CPAN Praises “Fair and Affordable” Auto Insurance Reform Legislation

Proposed bills would implement cost-containment measures, create fair auto insurance rating practices and bring more transparency to Michigan’s auto insurance system

LANSING, MI – A bipartisan group of Michigan lawmakers announced today a comprehensive set of legislation aimed at improving Michigan’s no-fault auto insurance system. The legislation, which lawmakers have dubbed the “Fair and Affordable No-Fault Reform Package,” is currently in the process of being drafted and is expected to be introduced in the coming weeks.

“While we have not yet seen the final bills, this is the closest we have seen to a complete no-fault reform package in a long, long time,” said Coalition Protecting Auto No-Fault President John Cornack. “The proposals unveiled today would bring dramatic and lasting improvements to Michigan’s insurance system that all sides would benefit from. Whether you are a driver, an accident survivor, a healthcare provider or even an insurance company, there is something to like in this package.”

Earlier this year, CPAN unveiled a 24-point plan to reform Michigan’s auto insurance system. The proposals announced today incorporate many but not all of CPAN’s recommendations, including:

  • Adopt reasonable fee schedules and attendant care limits to rein in medical costs related to auto injuries;
  • Stop non-driving related factors from unfairly impacting auto insurance rates;
  • Bring transparency to the Michigan Catastrophic Claims Association by making its ratemaking data available to the public;
  • Aggressively tackle fraud and claims handling abuse by creating a state fraud authority.

Cornack was particularly enthusiastic about proposals that will tackle unfair insurance ratings practices, such as using credit scores and job titles to set auto insurance rates.

“Everyone in this state should be pleased that lawmakers are bringing fairness to auto insurance rating practices,” said Cornack. “Our research has shown that insurance companies will use every excuse imaginable to increase rates for drivers. One company even charges as much as 33 percent more to women than men for the same car, address and driving record. That is completely wrong and must be stopped.”

Legislators announcing the Fair and Affordable No-Fault Reform package included Rep. Rep. Ben Frederick (R-Owosso), Rep. Donna Lasinski (D-Scio Township), Rep. Joseph Graves (R-Argentine Township), Rep. Sherry Gay-Dagnogo (D-Detroit), Rep. Michael Webber (R-Rochester); Rep. Tim Greimel (D-Auburn Hills); Rep. Pete Lucido (R-Shelby Township); and Rep. Ed Canfield (R-Sebewaing).

“We are particularly encouraged to see Democrats and Republicans working together come up with a solution that protects accident survivors while still lowering rates across the state,” said Cornack. This sort of bipartisan approach is something that has all too often lacking when it comes to this issue.”

In addition to containing medical costs and addressing unfair rating practices, lawmakers also announced legislation to fix problems caused by two recent Michigan Supreme Court cases that have drastically harmed Michigan’s no-fault auto insurance system.

Admire vs. Auto Owners has been used by insurance companies to deny paying no-fault benefits for legitimate expenses needed by auto accident victims, including handicapped accessible transportation and even specialized food needed by patients. Lawmakers plan to introduce legislation to ensure that accident survivors will have these basic needs met.

Legislation will also be introduced to fix the disastrous court ruling Covenant Medical Center vs. State Farm, which prevents medical providers from suing insurance companies on behalf of auto accident patients when insurers refuse to pay for treatment that has been rendered. The decision puts patients squarely in the crosshairs of litigation, because health care providers will no longer be able to battle insurance companies on behalf of their patients.

“Both of these decisions were a miscarriage of justice that, if allowed to go uncorrected, posed a serious threat to Michigan’s no-fault system,” said Cornack. “We greatly appreciate the work these lawmakers have done and continue to do to bring lower rates to drivers while protecting the elements that make Michigan’s no-fault system so great.”


Higher Premiums for Widows, Other Single Women in Michigan Auto Insurance Market

Study Finds Some Insurers Raise Rates on Female and Unmarried Customers Despite Michigan Law Prohibiting Use of Gender or Marital Status for Pricing Car Insurance 

Lansing – Widowed drivers in Michigan are charged more by some auto insurers than married drivers of the same age, even if they have perfect driving records, according to new data released today by Michigan’s Coalition Protecting Auto No-Fault (CPAN). Testing also found companies charging women significantly more for basic auto insurance than men, including young men often considered the highest risk drivers. These surcharges appear to violate Michigan law, which states: “an insurer shall not establish or maintain rates or rating classifications for automobile insurance based on sex or marital status.”

A survey of online premium quotes from several large auto insurers operating in Michigan, found that Progressive and Esurance alter rates for drivers based on their gender and marital status, and Liberty Mutual charges more to unmarried drivers.

  • These three companies raise widows’ and other single women’s premiums between five and ten percent compared with married women;
  • Progressive charges women with perfect driving records as much as 38 percent more than men with the same record, same vehicle, and same address;
  • Esurance charges women with perfect driving records as much as 33 percent more than men with the same record, same vehicle, and same address; and
  • Other insurers tested, including Allstate and AAA, appear to comply with state law and do not vary rates based on gender or marital

“It is both unseemly and improper to increase prices for someone when her spouse dies,” said Douglas Heller, an independent insurance expert who conducted the research for the Coalition Protecting No- Fault (CPAN). “Michigan law is supposed to prevent insurance companies from charging more to women or unmarried drivers, but some insurers seem to be ignoring the law and charging hundreds of dollars more to drivers simply because they are female, single, divorced, or widowed.”

Using insurance companies’ websites, Heller compared nearly 100 premium quotes provided to male and female drivers of different marital statuses and ages. The research also looked at whether the patterns changed based on geography, testing rates in both Detroit and Brighton, Michigan.

Throughout the testing, other factors such as address, type of car, and annual miles were held constant. In all instances, the drivers tested had perfect records with no accidents, tickets, or claims.

“This study reveals yet another unfair factor that insurance companies use to make extra profits at the expense of Michiganders,” said State Representative Donna Lasinski (D – Scio Twp). “Discriminating in rates based on sex or marital status is illegal, but also fundamentally wrong. We need to make sure that good drivers have good rates, period.”

Progressive and Esurance charged between 10 percent and 38 percent more to women than men in Detroit, in one instance nearly $1,000 per year, despite all drivers tested having a clean driving record (see Figure 1). The same pricing structure was evident in Brighton, though the penalty for “driving while female” was somewhat less with the increases on female drivers ranging from 3 percent to 26 percent.

“There is no reason to punish good drivers based on their sex, and Michigan law is right to prohibit it,” said Heller. “But when gender is used as a factor, no one in or out of the insurance business thinks that young male drivers are the ones who should get the discounts, so it is very strange to see companies charging hundreds of dollars more to young women than young men.”

Three companies also charged different rates to married and unmarried drivers. Liberty Mutual, Progressive, and Esurance charged widows (female drivers whose spouse is deceased), higher premiums than if their spouse were still alive. Figure 2 shows the widow penalty in both Detroit and Brighton.

Notably, the testing found that married male drivers actually saw premiums from Progressive and Esurance drop after they became widowers, though Liberty Mutual consistently applied a 5 percent surcharge on all drivers who lose a spouse, regardless of their sex.

“Women already struggle for equal pay, and here we have insurance companies piling on by charging women drivers more for auto insurance. It is a blatant violation of the law and must be stopped,” said State Representative Sherry Gay-Dagnogo, who chairs the Detroit Caucus and also serves on the House Insurance Committee.

As with the widow penalty, insurers charged more to divorced and single women than married woman, as shown in Figure 3. Once again, however, Progressive and Esurance lowered rates for 35 year old men after a divorce, even as they hiked premiums for female divorcees. Liberty Mutual charged more to divorced drivers whether male or female.

“Under state law, every driver must purchase auto insurance, whether they are male or female,

married or not, and good drivers should get the best prices, regardless of their sex or marital status,” said Heller. “When insurance companies are allowed to slice, dice, and price Michiganders according to personal characteristics that have nothing to do with their driving, many good drivers end up paying more than they should or driving uninsured, and it’s one of the reasons premiums are so high inMichigan.”

In August, CPAN issued a report highlighting socioeconomic rating factors used by auto insurance companies in Michigan – including job title, education level, and homeownership status – showing that several insurers charge substantially higher premiums to working class drivers in the state. Unlike sex and marital status, there is no explicit statutory prohibition on the use of those rating factors byinsurance companies, though they may be deemed “unfairly discriminatory,” according to insurance expert Heller.


Without Transparency, Michigan Catastrophic Claims Association is Taxation Without Representation

LANSING – Coalition Protecting Auto No-Fault (CPAN) President John Cornack used today’s tax filing deadline to take the Michigan Catastrophic Claims Association (MCCA) to task for practicing “taxation without representation.”

The MCCA is a private non-profit organization created by Michigan Legislature in 1978. It serves as a reinsurance fund that reimburses auto insurance companies for personal injury claims exceeding $545,000. Each Michigan driver currently is required to pay $160 annually per vehicle to fund the MCCA. In June, that fee rises to $170.

“Our founding fathers were adamant that there should be no taxation without representation, yet that is exactly what we have happening with the MCCA,” said Cornack. “Here we have an organization created by the Legislature that holds more than $18 BILLION of the public’s money, operating with no real public oversight. It’s a travesty.”

MCCA’s board includes AAA Insurance, Auto-Owners, Citizens Insurance, Farmers Insurance and State Farm. The Michigan director of the Department of Insurance and Financial Services serves as a non-voting ex-officio member. MCCA board meetings are not subject to the Open Meetings Act, and the organization refuses to comply with state Freedom of Information Act laws.

CPAN has filed a FOIA lawsuit seeking to open the MCCA’s rate-making data. The Michigan Court of Appeals ruled last year that the MCCA is a public body as defined by Michigan law, but disagreed with CPAN’s assertion that the organization’s FOIA exemption is unconstitutional. The case is currently in the State Supreme Court.

In addition, legislation has been introduced in both the State House and Senate that would bring transparency to the MCCA. Senate Bills 240 and 241 would require MCCA to abide by Michigan’s Open Meetings and FOIA laws. House Bill 4354 would do the same but also require a member of the public to also sit on the MCCA board and give the State Insurance Commissioner the authority to disapprove of MCCA rate charges that are deemed excessive.




Group Launched to Fight for Fair Auto Insurance Rates in Detroit

Several community leaders in Detroit joined together today to raise their voices against Detroit’s high auto insurance rates. Spearheaded by former State Rep. Brian Banks, the Detroit Alliance for Fair Auto Insurance launch included Detroit City Council President Brenda Jones, Spirit of Love Church Pastor DaRell Reed and auto accident survivor Saundra Gay.

The new organization will seek to educate Detroit residents about Michigan’s auto insurance system and empower them to be advocates for fair auto insurance reforms at the state capitol. Key issues raised at the news conference, which can be viewed on the group’s Facebook page, include the insurance company practice of using non-driving related factors like credit scores to set higher rates, and redlining in Detroit.

Ms. Gay, who was injured in a rollover accident in 2000, is quoted on the group’s news release as saying “I’m alive today and able to be a productive member of society because of the care and upport provided by Michigan’s no-fault auto insurance coverage. It’s critical that lawmakers in Lansing do everything they can to reduce rates while ensuring accident victims get the care they need.”

The Detroit Alliance for Fair Auto Insurance said it plans to hold a series of town hall discussions throughout Detroit in May where they will educate residents about their auto insurance policies and discuss ideas for lowering auto insurance rates.

CPAN is pleased to see that the organization was adamant that any changes to Michigan’s no-fault system must protect accident survivors while also lowering rates.

More information about the Detroit Alliance for Fair Auto Insurance can be found at


CPAN Praises No-Fault Transparency Legislation

LANSING – Sen. Steve Bieda (D-Warren) introduced legislation today that would bring much needed transparency to Michigan no-fault auto insurance system. The legislation, Senate Bills 240 and 241, requires the Michigan Catastrophic Claims Association (MCCA) to abide by Michigan’s Open Meetings and Freedom of Information (FOIA) acts.

In addition to Sen. Bieda’s bills, Reps. Henry Yanez (D-Sterling Heights) and Abdullah Hammoud (D-Dearborn) introduced House Bill 4354 in the State House. In addition to subjecting the MCCA to the Open Meetings Act and FOIA, his bill would require the State Insurance Commissioner to appoint a member of the public to sit on the MCCA board and empower the commissioner to disapprove of any total MCCA charge the commissioner deems excessive.

The MCCA is a fund created by the state legislature that reimburses Michigan auto insurers for personal injury claims above $555,000. The $18.8 billion fund is governed by a board of insurance industry executives who refuse to comply with state transparency laws.

In support of the legislation, CPAN spokesperson Josh Hovey issued the following statement:

“Today, more than ever, transparency is essential for a functioning democracy. We hope lawmakers from both parties will join together to support transparency and accountability for their constituents and all Michigan drivers.

“The MCCA is a critical piece of Michigan’s auto insurance system because it enables auto insurance companies to provide lifetime coverage for our state’s most seriously injured accident victims. But as a state-created organization that charges $170 on every insured vehicle in Michigan, the public expects transparency. If the insurance company executives are confident that’s a reasonable charge, they should have no problem opening up the MCCA books to public scrutiny.

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.


 The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting  

Michigan Drivers Handed Secretive $10 Auto Insurance Rate Increase

LANSING – The Coalition Protecting Auto No-Fault (CPAN) learned today that Michigan drivers will pay an additional $10 on their auto insurance premiums this year. The cost increase is the result of the insurance industry-controlled Michigan Catastrophic Claims Association (MCCA) increasing the fee charged to every Michigan auto insurance policy from $160 to $170 per vehicle.

The MCCA is a reinsurance fund created by the state legislature that helps reimburse insurers for costs of caring for catastrophic auto accident victims for any claim above $555,000. The organization, which reports holding $18.8 billion in assets, is governed by a board of insurance industry executives and is not subject to state Open Meetings or Freedom of Information laws.

In response to today’s announcement, CPAN spokesperson Josh Hovey issued the following statement:

“The MCCA is an important tool that helps ensure Michigan’s most seriously injured auto accident survivors receive the care they need. But the public has a right to know how it sets its rates. This is an organization created by our state government that is allowed to be controlled entirely by insurance companies without any transparency whatsoever. It’s unacceptable.”

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.


The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting