CPAN slams Insurance Alliance of Michigan for its ongoing efforts to deny needed care to catastrophic crash survivors
CPAN slams Insurance Alliance of Michigan for its ongoing efforts to deny needed care to catastrophic crash survivors
Hutchings: Every way you look, Michigan’s auto insurance law is a disaster
LANSING, Mich.—(April 28, 2022)—CPAN, the consumer protection organization fighting for fair insurance laws, today blasted the Insurance Alliance of Michigan for continuing to exaggerate the impacts of auto insurance reform as part of its ongoing efforts to destroy Michigan’s post-acute care industry and deny needed care to catastrophic crash survivors.
On Wednesday, IAM released a statement that 42 new auto insurance companies have entered the Michigan market since auto insurance reform was passed in 2019, alleging it will “drive down costs.”
That hasn’t happened. According to a recent statewide poll conducted by Marketing Resource Group (MRG), two-thirds of Michigan voters say their rates have not gone down at all, while 35.9% say their rates have actually increased. Only about 6% of voters said their rates have gone down significantly.
“Every way you look, Michigan’s auto insurance law is a disaster,” said Devin Hutchings, CPAN president. “Few Michiganders are saving any money, and thousands of our most vulnerable residents are suffering. By now, it should be clear that this ‘reform’ was nothing but a scam to pad the record profits of auto insurance companies.”
Hutchings added that insurance companies have restarted the practice of penalizing consumers who were previously uninsured—a practice that was temporarily blocked by the new law.
In March, CPAN unveiled research showing how customers of Citizens Insurance—one of the largest auto insurance companies in the state—are paying the insurer more now than they were before the new law was passed. By analyzing public documents, the research found that Citizens customers are paying the company $90 more for their combined auto insurance coverages now than before reform was passed, despite many of them having significantly fewer benefits should they get into a catastrophic crash.
The research also found that discriminatory pricing persists—the rate charged to a Citizens customer of the 48215 ZIP code in Detroit purchasing only $50,000 in Personal Injury Protection (PIP) benefits is $1,564 more than the rate charged to a resident of the wealthy 48085 ZIP code in Troy buying unlimited/lifetime PIP.
According to a recent report from the nonprofit health organization MPHI, as of October 20, 2021, 1,548 no-fault patients have been discharged by their previous providers and 3,049 Michigan jobs have been eliminated since a 45% cut in catastrophic care went into effect in July 2021. Meanwhile, 140 organizations reported having to significantly reduce services, 96 organizations can’t accept new patients with no-fault insurance funding, and 21 organizations have had to cease operating completely, devastating Michigan’s system of post-acute care and overburdening a healthcare system already strained due to the pandemic.
“As rehabilitation centers and home-care agencies are forced to close down, catastrophic survivors will no longer get the care they paid for and were promised,” Hutchings said. “That’s exactly what the auto insurance companies always wanted. The Legislature needs to step in, protect accident victims, and end this crisis of care.”