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 CPAN 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.”