In 1972, Gov. William Milliken (1969 to 1983) championed the enactment of Michigan’s no-fault auto insurance system.
In Michigan, if you have a catastrophic accident, your medical expenses, wage losses, replacement services, rehabilitative services and damages caused to other people’s property are covered in full.
These benefits are paid out of the Michigan Catastrophic Claims Association (MCCA), a private nonprofit association every Michigan driver pays into.
As of 2012-2013, insurance companies assess a $175 per vehicle to cover catastrophic claims. Under our no-fault auto insurance system, the insurer pays the claim and is reimbursed by the MCCA for medical costs exceeding $500,000.
The recent effort led by Governor Rick Snyder to cap insurance coverage is almost identical to what the people of Michigan rejected in 1992 and 1994 by ballot proposal.
In 2011, Gov. Snyder’s proposed no-fault auto insurance reforms failed to garner the necessary legislative support for passage.
Proponents of the reforms deceivingly contest that no-fault is the cause of our state’s high auto insurance rates.
This isn’t true, you have to examine the averages for each portion of the policy, in doing so you will see that no-fault isn’t the perpetrator.
The average uncapped lifetime Personal Injury Protection (PIP) benefit costs Michigan drivers $544.20 per year, just $60 above the national average of $484.03.
Collision insurance is the most expensive portion of our auto insurance policies.
The safeguards, protections and medical benefits under our no-fault auto insurance system are far superior to other states for a nominal net cost of $60 per driver annually.
Evidence that we’re getting a tremendous return on our investment. The peace of mind is invaluable.
Michigan is also one of the few states where an accident survivor is certain to receive immediate medical attention. In other states, accident victims must sue to receive reimbursement for treatment, or they’re placed on Medicaid.
In 2003, Colorado switched from a no-fault to a tort system. Five years later, Colorado’s Medicaid costs doubled from auto accidents, proof that medical costs of the uninsured will be passed on to taxpayers through increased Medicaid costs, unpaid hospital and emergency room bills, and reduced rehabilitative care.
Despite the nation-leading value of our no-fault system, insurers have continued their attacks.
The insurance lobby falsely maintains that this legislation would reduce costs and argues that the MCCA is financially insolvent; however, they refuse to ensure savings, open the MCCA’s books, or disclose the economic and actuarial assumptions their projections are based on.
This information is critical to the public and Legislature’s understanding of our state’s no-fault auto insurance system and our ability to make sound policy decisions.
The proposed reforms would cap PIP benefits at $1 million, while this may seem reasonable, it would be devastating to individuals who suffer catastrophic injuries and their families who must resort to filing law suits in order to pay for their loved one’s medical treatment.
It is very easy to go through millions of dollars in medical expenses and hundreds of thousands in out-of-pocket expenses when the unthinkable occurs.
That is why we have an insurance system that acts as a safety net in these times of need.
Capping our state’s no-fault insurance system is fiscally and morally irresponsible.
Please let me know how I can be of assistance to you so that together, we can continue to make progress in our community.
N1199 House Office Building
P.O. Box 30014
Lansing, MI 48909-7514
Phone: (517) 373-0152
Fax: (517) 373-8738
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I’m State Representative Stacy Erwin Oakes, and I have the honor of serving the 95th House District.
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State Representative Stacy Erwin Oakes
95th House District