Fox 17 Know the Law – Auto Insurance Premiums

High auto insurance rates is a hot topic of debate right now and continues to build momentum heading into election season. With the no-fault system under scrutiny and proposed changes in front of legislation, it’s important to understand how these premiums are set to determine if no-fault is really at fault.

No Regulatory Oversight of High Auto Insurance Rates in Michigan

First, it’s important to mention that Michigan has very loose regulatory oversight of premium setting practices with regard to auto insurance. Michigan defers to what is known as a file and use system. Under this system, the auto insurance provider determines the premiums and presents it before the insurance commissioner. The insurance commissioner then either accepts it or rejects it. In the forty plus years since the enactment of Michigan’s no-fault system, to the best of our knowledge, the insurance commissioner has never once rejected a rate.

No Definition of “Excessive”

Part of the reason rate proposals are seldom if ever rejected is because we have a loose definition of what “excessive” is in Michigan. While Michigan statute states that premiums can, in fact, be excessive, it gives little definition of the term.

Michigan statute defines “excessive” as:

“A rate that is usually high for the insurance coverage that is provided and a reasonable degree of competition does not exist with respect to the classification, kind, and type of risks to which the rate is applicable.”

There’s very little meaning in this description and it’s very subjective. This means auto insurance companies in Michigan can assess any rate within this vague definition and Michigan drivers are stuck with high premium prices.

Non-Driving Rating Factors

These factors determine your premium but have nothing to do with your driving record. Such factors include marital status, type of employment, age, and gender, to name a few. A recent study by InsuranceQuotes.com that released staggering statistics based on their credit:

• Fair credit: pays 90% more than someone with good credit
• Poor credit: pays 229% than someone with good credit
• Credit scoring disparity used for premium setting is worse in Michigan than any other state

So how do we lower these premium prices moving forward? Let’s start with:

1. Better regulatory oversight of rate-setting practices
2. Greater definition of what is “excessive”
3. Banning the use of non-driving rating factors

If you’ve been injured in a car accident in Michigan, call a Sinas Dramis attorney for a free initial case review at (517) 394-7500.

Fox 47 Morning Blend Michigan No-Fault Insurance Law

Proposed Changes in Michigan Auto Insurance Reform Debate

The biggest proposed change in the Michigan auto insurance reform debate would limit the care that’s currently available under the no-fault system. As it stands, residents of the state get coverage for whatever is reasonably necessary for their care, recovery, and rehabilitation in the unfortunate event they are seriously injured in a motor vehicle accident in Michigan. This part of no-fault insurance could see proposed changes later this year.

Michigan auto no-fault attorney, Steve Sinas

But there are other alternatives to modify the no-fault system so that it works better for people without having to sacrifice those benefits. These alternatives would potentially bring down the cost of insurance as well. For instance, limiting the abuse and waste that is currently in the system and making no-fault run more efficiently. Also, we need more transparency in how insurance companies are actually setting premiums. For example, many car insurance companies use non-driving related factors to charge certain groups of people higher rates. This is one of the reasons people in urban areas, such as Detroit, are being charged too much for auto insurance. We need to do something about this.

Duggan Lawsuit Leaves Questions Unanswered About Michigan Auto Insurance Reform

Recently, Mike Duggan, mayor of Detroit, filed a federal lawsuit to find the Michigan no-fault system unconstitutional. The basis for this case is that certain people, especially in metro areas, are being charged too much for insurance. However, this lawsuit only looks at the cost of insurance. It doesn’t consider the other issues we touched on briefly: whether premiums are fair and how they are set. The Supreme Court has already said that the Michigan state government needs to make sure that these premiums are fair and affordable. So, the question becomes, “Does this lawsuit really get at what the problem is? Is the problem the coverage itself, or that premiums are inequitable?” This lawsuit leaves those questions unanswered.

Sinas reminds viewers that Michigan has a truly unique auto insurance system and that the positive influence it has on families is remarkable and incalculable. He acknowledges there are flaws in the current system, but instead of completely ending it, we should instead look into ways to amend it.

If you’ve been injured in an accident in Michigan, you may be entitled to no-fault benefits. Contact a personal injury attorney at Sinas Dramis Law Firm today for a free initial case review or call us at (517) 394-7500.

This topic is important, so it’s time to bring you up to speed. Here’s a brief overview of what’s happened in the no-fault insurance debate so far this year.

2018 Developments in the No-Fault Insurance Debate

February 2018
House Republicans introduced House Bill 5517 and House Bill 5518. These packages of bills would essentially put an end to auto no-fault as we know it and replace it with a pure tort liability state. Here’s how this affects you:

1. Michigan car accident victims will only be able to sue the at-fault driver for all economic and non-economic losses.
2.  The at-fault driver, therefore, becomes responsible for the injured party’s lost wages, medical expenses, attendant care, and vehicle damages.
3. Michigan drivers will no longer be entitled to catastrophic injury coverage. However, they will still have to pay annual assessments to the Michigan Catastrophic Claims Association.
4. Michigan drivers will only be required to carry liability insurance in 20/40/10 policy limits. This means if you’re in an accident under the new tort liability scenario and sue the at-fault driver, they are only required to pay up to their cap of $20,000 in medical expenses.

June 2018
Michigan Senate passed Senate Bills 1014 and 787. These bills essentially reduce the protective benefits catastrophically injured individuals receive and shift the cost of care onto taxpayers. Here’s what this looks like:

1. Senate Bill 1014 seeks to cap the cost of care, no matter the seriousness of the injuries, to $400,000.
2. Senate Bill 787 offers what’s known as a “carve-out” for senior citizens, which is presented as a benefit but in actuality severely decreases their protections. Essentially, this bill will encourage drivers 65 years and older to opt-out of their current unlimited no-fault policies and PIP benefits in return for a policy with a $50,000 cap on all damages – including medical expenses, attendant care, and wage loss.
3. Greatly reduce the payment to attendant caregivers, including family members. This means if you’re catastrophically injured and need round-the-clock care requiring a family member to stay home with you, they will receive significantly less in compensation.

Currently
The fall legislative session is mere weeks away and several no-fault insurance bills are up for debate, including those previously mentioned. There is much work to do to ensure Michigan residents continue to receive the protections and benefits from the state’s no-fault system. This is a system worth fighting for. And while we are all for lowering the cost of auto insurance in Michigan, that shouldn’t come at the price of making sure you and your family are protected in the event you are seriously injured in a motor vehicle accident.

In fact, one in five auto accidents happens in a parking lot. According to the National Safety Council, as many as two-thirds of drivers are distracted when they’re pulling into a parking lot. The leading cause of these distracted driving accidents? You guessed it: cell phones.

Parking Lot Car Accident: When The Other Driver Is Unknown

In the unfortunate situation where your vehicle has been hit and the responsible party has not left a note (i.e., a hit-and-run), remember that the store and/or the parking lot owner are not responsible for the damage to your automobile.

The first thing to do is find out if you have collision coverage through your auto insurance policy. Contact your no-fault insurer and see if the damage is covered. It’s often recommended, however, that relatively minor repairs be paid out of your own pocket, so your insurance rates don’t spike.

Also, keep in mind that shopping malls and retail stores typically have cameras in their parking lots. So, it is a good idea to check with security, to see if there is footage of the vehicle hitting your car. This way, you may be able to get the vehicle’s license plate number and identify the driver who struck your car.

Car Accident In A Parking Lot: When The Drivers Are Known

When two vehicles collide in a parking lot, the first thing to do is determine whether anyone is injured. If someone has suffered an injury, emergency responders should be immediately contacted.

Once any first responders have been reached, you should take pictures of the vehicle damage. You should also exchange information with the other driver, making sure to document the following:

• date, time and location of the parking lot car accident.
• names, addresses, phone numbers and email addresses of the other driver, any passengers, and witnesses.
• all driver’s license numbers.
• make, model and license plate number of the other vehicle involved.
• other driver’s insurance company and policy number.

Even if the collision is minor and no one appears to be injured, you should protect your legal rights by calling the police and filing a Michigan car accident report. If you don’t notify law enforcement and any issues arise down the road, then it’s your word against the other driver’s. For example, a sore neck or another seemingly innocuous injury on the day of the collision may worsen over time. (Note: some law enforcement agencies will not respond to accidents on private property, especially if no one is injured.)

Also, keep in mind that a police report must be filed when a Michigan car accident results in personal injury, death or vehicle damage of more than $1,000.

Insurance And Damages For A Parking Lot Car Accident

Can you get Michigan no-fault benefits for injuries sustained in a parking lot car accident? The answer is yes, as long as a motor vehicle (as defined by the No-Fault Act) was involved. For purposes of claiming no-fault benefits, it doesn’t matter whether the accident happened on a public highway or in a private parking lot.

Be aware, however, of the “parked vehicle exception.” Under this provision, a person injured in a Michigan car accident may be entitled to no-fault PIP benefits only when a vehicle is improperly parked and creates an unreasonable risk of injury. This exception can be tricky, which is why an experienced Michigan auto accident attorney should be contacted to determine whether it applies.

In addition, you may be able to bring a claim against the at-fault driver for your car accident injury damages that aren’t covered by no-fault insurance. This is often referred to as an auto negligence claim. Strict requirements must be met in order to file an auto negligence lawsuit.

What about the damage to your vehicle? Michigan has what is called a “mini-tort” law that allows drivers in minor crashes to sue and recover up to $1,000 for vehicle damage, as long as the automobile is properly insured. Note that, if you want to file a claim under the mini-tort law, you will need a copy of your Michigan accident report.

Keep in mind, however, that damage to an unoccupied, parked vehicle is not covered under the mini-tort law. Also, certain conditions must be met for the law to apply:

• the other driver must have been at least 50 percent at fault.
• if your auto insurance policy includes collision coverage and you don’t have to pay a deductible before costs are covered, then you may not sue under the mini-tort law.
• if your auto insurance policy does not include collision coverage, then you may sue for damages under the mini-tort law (keeping all other prerequisites in mind).

Remember: the mini-tort law covers only vehicle damage. It does not cover any personal injuries sustained in the collision.

In this video, Grand Rapids car accident lawyer Tom Sinas talks about the mini-tort law and the steps you should take if you’re in a Michigan parking lot car accident.

Tips For Avoiding A Parking Lot Car Accident In Michigan

So, what can you do to prevent a parking lot car accident from happening? Here are some suggestions:

• drive slowly in parking lots.
• constantly scan your surroundings – watch for vehicles and pedestrians cutting across parking lanes.
• use your turn signals when taking a parking space.
• be mindful of how much space you’re leaving the vehicle(s) beside you.
• do not park in a compact space if you don’t have a compact car.
• before backing out of a parking space, turn your head to visually make sure it’s clear – don’t just rely on your rear-view mirrors and side mirrors.

If you’ve been injured in a Michigan parking lot accident and have questions about your insurance benefits or your legal rights, our Lansing car accident lawyers and Grand Rapids auto accident attorneys are here to help. Contact us today for a free initial consultation.

When you find yourself driving elsewhere besides Michigan, there are several things you should keep in mind about your auto no-fault insurance.

Out-Of-State Car Accidents And No-Fault Benefits

First and foremost, remember that Michigan no-fault insurance typically applies to out-of-state auto accidents. This means that, if you’re injured, you’re likely entitled to no-fault PIP benefits.

Your Michigan no-fault policy protects you and your passengers if you’re in a car crash anywhere in the United States (including U.S. territories and possessions) or Canada, as long as:

• the injured person is:
  • a named insured under the insurance policy, or
  • a spouse or relative of a named insured, who is domiciled in the same household or is an occupant of a vehicle involved in the accident.

What if a person injured in a car accident is not a named insured under a Michigan no-fault policy or is not a relative domiciled with the insured party? Then in order to receive no-fault benefits, the injured person must be occupying the motor vehicle, the owner of which was insured under a Michigan no-fault policy covering the vehicle that was involved in the accident. In other words, it is not enough that the owner has a no-fault policy covering a vehicle that was not involved in the crash — the vehicle involved must be insured under the particular policy.

Also keep in mind that, if you rent a vehicle and are in an out-of-state car accident, you’re entitled to no-fault benefits, even if you did not purchase any rental car insurance.

Review Your Policy, In Case Of An Out-Of-State Car Accident

Basically, it boils down to this: review your Michigan no-fault policy before leaving on your journey. If you have questions about your coverage, call your insurance agent and get answers.

In this video, Grand Rapids auto accident lawyer Tom Sinas talks about Michigan no-fault insurance and out-of-state car accidents.

If you’ve been injured in an out-of-state accident and have questions about your insurance benefits or your legal rights, our Michigan car accident attorneys are here to help. Contact us today for a free initial consultation.

The No-Fault Act specifically allows for this independent medical examination after a car crash victim files a claim for Michigan no-fault benefits. The law says that, when the mental or physical condition of the claimant (the accident victim) is at issue, the insurance carrier can request that the person be examined by an “independent” physician. The law also says the insurer’s right to conduct the exam must be “reasonable.”

However, various concerns surround these independent medical exams.

Independent Medical Exam Results Usually Favor The Insurer

If you’ve been injured in a Michigan car accident and are asked by your no-fault insurer to undergo an independent medical exam, keep these things in mind.

• The examination will be conducted by a doctor who is hired by the no-fault insurance company.
• The insurance company can send you to any doctor it chooses, including a physician with little or no experience handling the type of injury that you’ve suffered.
• There is little regulation over independent medical exams.
• There are no qualification requirements for physicians who perform independent medical exams.

Another critical thing to remember is this: the opinion of a doctor who performs an independent medical exam is frequently biased in favor of the insurance company. Why? Because the physicians who conduct these exams are usually closely aligned with the insurance industry. In fact, some IME doctors do not practice medicine and, instead, have chosen to earn a living by working for insurance companies.

Do Not Ignore An Independent Medical Exam Notice

If you receive a notice from your no-fault insurance company that an independent medical exam has been scheduled, do not ignore it. If you fail to appear at the scheduled exam without justification, your claim for no-fault PIP benefits will be jeopardized.

If you’ve been notified that you need to undergo an independent medical exam, you should be prepared to explain: 1) your medical history, including any pre-existing conditions; 2) your auto accident injuries and how they happened; and 3) what symptoms keep you from working/keep you from participating in certain daily activities.

After an independent medical exam has been conducted, a report will be issued setting forth the IME doctor’s opinion. While this report will frequently favor the insurance company, you have the right to request a copy of it.

Also, keep in mind that the doctor who performed the exam will not provide you any further treatment. Rather, the IME doctor will simply issue the report for the insurance company.

Independent Medical Exams Are Often A Delay Tactic

Unfortunately, insurance companies frequently use independent medical exams as a way to delay the payment of no-fault benefits. In turn, this also delays the crash victim’s recovery.

In fact, even if you were receiving no-fault benefits before the independent medical exam was conducted, the examination may result in benefits being cut off, until the dispute is resolved.

Meanwhile, keep in mind that it’s not uncommon for the IME doctor’s report to contradict the findings and diagnosis of your own physician. If this happens, you can present evidence from your own treating doctor, challenging the IME doctor’s report.

When it comes to independent medical exams, Michigan residents deserve better than what is currently being offered. Auto accident victims should be evaluated by doctors who actually treat patients, and not doctors who earn a living performing exams for insurance companies.

In this video, Grand Rapids auto accident attorney Tom Sinas talks about independent medical exams.

If you’ve been injured in a crash and have questions about your independent medical exam or no-fault benefits, our Lansing auto accident attorneys and Grand Rapids car accident lawyers are here to help. Contact us today for a free initial consultation.

For the past few months, House Bill 5013 has been touted as a way to slash auto insurance rates for Michigan motorists, particularly drivers in Detroit. However, the proposal really didn’t guarantee any reduction in insurance premiums. Instead, it took away Michigan car accident victims’ rights and gave more power to the auto insurance companies.

“After a long night at the Capitol, I am happy to report that the horrible no-fault reform bill, HB 5013, failed to pass,”  Lansing car accident attorney Stephen Sinas, a member of the Coalition Protecting Auto No-Fault legal team, said after the bill’s defeat. “Thanks to all who took the time to send in the petition [against the bill] and get the word out.”

Stephen added, “No-fault reform will continue to be an issue. Hopefully, we can move toward much more sensible reforms that will work to make the system better for everyone.”

Why Was House Bill 5013 Defeated?

House Bill 5013 was pushed by Detroit Mayor Mike Duggan, House Speaker Tom Leonard, Rep. Lana Theis and the insurance industry. Basically, it would have destroyed Michigan’s no-fault insurance system. Here’s how.

1. Authorized limits on all no-fault PIP benefits.
2. Drastically changed coverage for injured children.
3. Prohibited any victim of a reckless, negligent or drunk driver to recoup uncovered medical expenses from the at-fault driver.
4. Severely cut family-provided attendant care benefits.
5. Did not guarantee insurance rate reductions.
6. Did nothing to help eliminate abusive and unfair insurance practices.
7. Placed a heavier financial burden on Michigan taxpayers.
8. Allowed senior citizens to opt out of coverage.
9. Limited the benefits recoverable by a motorcyclist injured by a reckless or negligent driver who’s insured under a limited no-fault policy.
10. Gave insurance companies more power and more control over a patient’s medical care.
11. Took away the legal rights of patients.
12. Provided careless insurance agents immunity from any liability.
13. Would have caused the financial ruin of many Michigan families.

What Representatives Said About House Bill 5013

Here are some comments from House of Representatives members who voted “NO” on House Bill 5013:

• “Let’s be plain. There is NO guaranteed rate reduction in this bill.” ~ Rep. Brian Elder
• “One-sided HB 5013 defeated. It’s time for all parties to come to the table in good faith for a real solution to auto rates.” ~ Rep. Christine Greig
• “This is bad legislation paid for by insurances companies with no guarantees of rate relief only cuts benefits.” ~ Rep. Tom Cochran
• “They [accident victims] do not deserve to be shifted to the welfare rolls just because they’ve been hit by a drunk driver.” ~ Rep. Brian Elder
• “Michigan deserves better.” ~ Rep. Stephanie Lily
• “[A] fake reform package pushed by the insurance industry.” ~ Rep. Darrin Camilleri
• “Let’s take up Fair and Affordable reforms.” ~ Rep. Jeremy Moss
• “House Bill 5013 is a bad bill. But there IS a solution.” ~ Rep. Sam Singh (referring to the recently introduced Fair and Affordable No-Fault Reform Package)

Stay with Sinas Dramis and the Auto No-Fault Law Blog for updates on the no-fault reform efforts, as proposals continue to make their way through the Michigan Legislature.

The Fair and Affordable No-Fault Reform Package is among the most comprehensive Michigan no-fault reform measures to be introduced in the past decade.

The package is a clear alternative to House Bill 5013, which was defeated in the Michigan House on November 2, 2017. The measure was pushed by Detroit Mayor Mike Duggan, House Speaker Tom Leonard, Rep. Lana Theis and the insurance industry. Contrary to what was touted by proponents of House Bill 5013, the proposal did not guarantee lower auto insurance rates and, instead, would have destroyed Michigan’s no-fault system as we know it.

The Fair And Affordable Michigan No-Fault Reform Package

House Bills 5101-5111 would do the following:

1. Ban non-driving rating factors that are currently being used by insurance companies to set rates, such as credit score, gender, occupation and education level.
2. Implement a fee schedule at 185% of workers’ compensation for all medical providers treating auto accident victims, with cost-of-living adjustments. Level 1 and 2 trauma centers would not be subject to the fee schedule. The proposal will also streamline the claims process, improve fairness, reduce costs and improve efficiency by requiring electronic billing between providers and insurance companies.
3. Establish a $15 per hour rate schedule for family-provided attendant care, with allowable waivers to ensure fair compensation for certain patients whose disabilities and needs justify more skilled care. The bill also ensures patients who require 24/7 care will have access to it.
4. Create fair standards and qualifications regulating physicians who conduct independent medical exams when requested by insurance companies.
5. Strengthen an existing law requiring that auto insurance premiums are “appropriately reduced” for any consumer who buys a coordinated no-fault policy.
6. Fix several Michigan appellate court decisions that have had a detrimental impact on car crash victims and the medical providers that  treat them:
   • Mitigate the unfairness of the Admire v Auto Owners decision, which has been used by insurance companies to deny paying legitimate expenses needed by accident victims with catastrophic injuries, including handicap accessible transportation and barrier free accommodations.
   • Mitigate the unfairness of the decision in Bahri v IDS Property Casualty Ins Co, which allows insurance companies to void an entire policy for any claims containing errors that the insurance companies allege are fraudulent.
   • Re-instate the “innocent third-party rule,” which was overturned in Bazzi v Sentinel Ins Co, thereby protecting third-party claimants who did not participate in fraudulent procurement of a policy.

In addition, several other proposals also make up the Fair and Affordable No-Fault Reform package:

1. A proposal to allow senior citizens to lower their rates by ensuring Medicare and auto insurance are not providing duplicate coverage for an accident.
2. A proposal to resolve issues created by the Michigan Supreme Court ruling in Covenant Medical Center v State Farm, by restoring the right of medical providers to sue auto insurance companies that fail to pay for a patient’s care and related expenses.
3. House Bill 4672, which creates a fraud authority designed help lower rates by cracking down on auto insurance fraud.
4. House Bill 4049, which seeks to bring more transparency to the insurance system by requiring the Michigan Catastrophic Claims Association to disclose the actuarial calculations it uses to set the annual fee charged to every insured vehicle in the state (currently $170 per vehicle), as part of motorists’ insurance premiums.

Fair And Affordable Michigan No-Fault Reform: A Lasting Change

George T. Sinas, Stephen H. Sinas and Thomas G. Sinas are the legal team for the Coalition Protecting Auto No-Fault (CPAN), which supports the Fair and Affordable No-Fault Reform Package. The CPAN legal team issued a thorough analysis of House Bill 5013, the alternative no-fault proposal that was offered and which recently failed to pass the Michigan House.

In its analysis, the CPAN legal team concluded that House Bill 5013 would have been “the end of no-fault as we know it” because:

• it would have shattered the current availability of lifetime medical care and would “result in a severe loss of benefits for thousands of Michigan auto accident victims.”
• it gave “unprecedented control to government bureaucracy and insurance companies to determine and control the type of medical care and services that injured persons will receive under the No-Fault Act.”
• it gave “more power” to insurance companies while taking away the legal rights of Michigan auto accident victims.

In this video segment, Stephen Sinas talks about the legislative efforts to reform Michigan’s no-fault insurance system.

Stay with Sinas Dramis and the Auto No-Fault Blog as no-fault reform measures continue to make their way through the Michigan Legislature.

As part of the ongoing no-fault reform efforts in Lansing, House Bill 5013 was introduced in the Michigan Legislature on September 26, 2017. The no-fault reform proposal has primarily been touted as a way to slash auto insurance rates for Michigan motorists.

However, upon a thorough review by Lansing car accident lawyers George Sinas, Stephen Sinas and Tom Sinas — who comprise the legal team for the Coalition Protecting Auto No-Fault (CPAN) — it turned out that House Bill 5013 did not guarantee auto insurance rate relief for Michigan motorists.

So what exactly did House Bill 5013 do? Basically, the measure would have been “the end of no-fault as we know it,” according to the CPAN legal team. In addition to not guaranteeing auto insurance rate reductions, House Bill 5013 would have:

• authorized unprecedented dollar cap limitations on no-fault benefits.
• given insurance companies substantial control over a patient’s medical care.
• increased the power of insurance companies, while taking away the legal rights of patients.

House Bill 5013 Would Have Shattered Existing No-Fault Coverage

If passed, House Bill 5013 would have destroyed the promise of lifetime medical care that’s currently at the core of the Michigan no-fault insurance system. Basically, the bill would have resulted in a severe loss of benefits for thousands of Michigan auto accident victims. Here’s how.

First, House Bill 5013 would have allowed insurance companies to sell no-fault PIP benefit policies with woefully inadequate lifetime benefit caps. Policy options would have been:

• a lifetime benefit cap of $25,000. Note: contrary to some reports, this is not a $250,000 cap and, instead, is a $25,000 lifetime cap with a narrow exception for $225,000 in emergency medical care.
• a lifetime benefit cap of $500,000.

These two caps would have applied not only to medical expenses, but to all PIP benefits, including work loss and replacement services. This means that people who suffered a serious car accident injury and incurred medical expenses that exceeded their selected PIP benefit cap (which will happen in most serious injury cases where the $25,000 cap has been chosen) would have no PIP work loss benefits available to them.

House Bill 5013 also jeopardized the care of children injured in a car crash by completely altering the current no-fault law. Right now, children have access to lifetime medical care if they’re hurt in a Michigan auto accident, even if the parents did not purchase no-fault insurance. But because House Bill 5013 allowed consumers to purchase limited benefit caps, children who suffered severe injuries in a Michigan car accident would have faced a loss of lifetime care if their parents purchased limited benefit coverage — especially if they selected the $25,000 benefit cap.

Another significant change was that House Bill 5013 explicitly prohibited victims of reckless, negligent or drunk drivers to recover any uncovered medical expenses from the at-fault driver. How so? The proponents of House Bill 5013 deliberately deleted the words “allowable expenses” from §3135(3) of the No-Fault Act.

House Bill 5013 was also problematic for the following reasons: 1) it dramatically reduced reimbursement to medical providers that treat car accident victims; 2) it severely cut family-provided attendant care benefits; 3) it drastically reduced benefits for motorcyclists injured in crashes with negligent motorists; 4) it imposed medical transportation limitations; and 5) it allowed senior citizens to opt out of coverage. In fact, according to the House Fiscal Agency, House Bill 5013 could have increased costs for Medicaid by some $150 million each year after 10 years.

House Bill 5013 Did Not Guarantee Slashing Of Premiums

According to the CPAN legal team’s analysis, House Bill 5013 did not guarantee a reduction in Michigan auto insurance rates, although the measure was presented as such.

Why no guaranteed rate reduction? Two reasons:

• the premium reduction required by the bill applied only to the premium for PIP benefits — it didn’t apply to the total premium, which, in reality, is comprised of coverage far more costly than the premium for PIP benefits.
• no premium reduction was necessary if an insurance company could convince the Insurance Bureau that the failure to reduce the premium was “justified” by “using generally accepted and reasonable actuarial techniques.”

Meanwhile, Michigan taxpayers would also have taken a hit under House Bill 5013. This is because the medical expenses no longer covered by PIP benefits would have been shifted to other payment systems … and ultimately to taxpayers and employers. This could have potentially created the need for higher taxes, and employers would have faced the possibility of increased healthcare coverage costs.

In the end, House Bill 5013 would have caused financial ruin for many Michigan families. Why? Because those seriously injured in auto accidents who chose the $25,000 PIP benefit cap, and who incurred substantial medical expenses in excess of that cap, would have likely been unable to pay their medical bills. For many, this would have meant filing for bankruptcy, further impairing Michigan’s economy and financial recovery.

House Bill 5013 wholly benefited the insurance companies. The proposal gave insurance carriers more power and unprecedented control over an injured person’s medical care, while at the same time taking away the rights of Michigan auto accident victims. Here’s how:

• it called for restricted care through a “utilization” review.
• it allowed the use of intimidation tactics against medical providers, potentially causing their reluctance to provide treatment to car crash victims.
• it all but eliminated an injured person’s right to penalty interest and fees in no-fault benefit disputes.
• it let an insurance company recoup its fees and costs if benefits were found to be “not medically necessary” or if the claim was for “an excessive amount.”
• it offered careless insurance agents immunity from any liability.
• it did absolutely nothing to help eliminate abusive and unfair practices by insurance companies, including auto insurance redlining and using credit scores, income and gender as factors to assess Michigan auto insurance rates.

CPAN Legal Team’s Testimony On Now-Failed House Bill 5013

At an October 3, 2017, House Insurance Committee hearing on House Bill 5013, Lansing car accident lawyer Stephen Sinas and Grand Rapids auto accident attorney Tom Sinas presented joint testimony on the legislation.

Tom emphasized to the committee that House Bill 5013 did not guarantee any insurance rate reduction. “As a matter of fact, all it does is it intends to reduce rates by 40 percent for those people who buy the cheapest policies that have only $25,000 in general coverage,” he said.

Tom also pointed out the bill did nothing to address underlying insurance concerns, including how insurers set their rates. “There are things that we don’t do in this state — for example, we don’t make it illegal for insurance companies to charge people different amounts of money based on their zip code,” he told the committee. “If we want to tackle rates, we’ve got to be honest about the problems that are driving up rates, before we decide to get rid of all these protections we’ve had for over 40 years.”

Stephen added that House Bill 5013 afforded “very little power” to Michigan consumers. “The power goes to insurance companies, and I don’t know quite frankly how anybody could vote for that,” he said. “It looks like it was completely drafted by the insurance industry. There’s nothing but favors in it for the insurance company.”

Fair And Affordable No-Fault Reform Is Needed In Michigan

In the end, what Michigan really needs is the “Fair and Affordable No-Fault Reform Package” that has been proposed by a bipartisan group of state lawmakers.

Whether you are a driver, an accident survivor, a healthcare provider or an insurance company, the Fair and Affordable No-Fault Reform Package has something in it for everyone.

• implement a fee schedule for medical providers. The schedule would be set at 185% of the workers’ compensation rate, which reflects the complex treatment and increased attention that car crash victims require.
• establish an hourly rate schedule for family-provided attendant care. The schedule would allow for rates that are reasonably related to the nature and extent of the patient’s disability and needs, including patients who require 24/7 care.
• keep insurers from using non-driving related factors (such as credit score, gender and job title) to determine auto insurance rates. These factors have nothing to do with how cautious someone drives or how expensive their vehicle is to fix.
• require the Michigan Catastrophic Claims Association be more transparent with its annual per vehicle fee assessment, and require the MCCA’s rate-making data be made available to the public.
• create a meaningful Fraud Prevention Authority that will address fraud committed by claimants and providers, as well as prevent insurance companies from denying legitimate claims, which increases litigation and expenses.
• amend wage loss benefits to better align with the auto accident victim’s actual salary loss.
• correct the Admire v Auto Owners court decision, which has been used by insurance companies to deny paying for legitimate expenses needed by auto accident victims.
• correct the court decision in Bahri v IDS Property Casualty Ins Co, which lets insurance companies void an entire policy if a claim submission was made in error, or if the insurance company alleges fraud.
• reinstate the “innocent third-party rule,” which came to a screeching halt in the case of Bazzi v Sentinel Ins Co, thereby protecting innocent third-party claimants who did not participate in the fraudulent procurement of a policy.
• correct the May 2017 Michigan Supreme Court decision in Covenant Medical Center v State Farm, which prevents medical providers from suing insurance companies on behalf of auto accident victims when insurers refuse to pay for treatment that has been rendered.

In the following FOX 17 “Know the Law” segment, Tom Sinas talks about the problems with House Bill 5013.

Stay with the Auto No-Fault Law Blog for updates on no-fault reform in Lansing. Meanwhile, if you have questions about no-fault reform or have been injured in a Michigan auto accident, our experienced attorneys are here to help. Contact our Michigan accident lawyers today for a free initial consultation.

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Lansing, MI — A bipartisan group of state lawmakers recently announced a comprehensive no-fault reform package aimed at improving Michigan’s auto insurance system. The legislation, called the “Fair and Affordable No-Fault Reform Package,” will soon be introduced in the state Legislature.

“Fair And Affordable” No-Fault Reform Has Something In It For Everyone

John Cornack, president of the Coalition Protecting Auto No-Fault (CPAN), said the bipartisan legislative package will bring “dramatic and lasting improvements” to Michigan’s auto insurance system for everyone involved. “Whether you are a driver, an accident survivor, a healthcare provider or even an insurance company, there is something to like in this package,” he stated.

The Fair and Affordable No-Fault Reform Package incorporates many of the recommendations made by CPAN earlier this year, including:

• adopt reasonable fee schedules and attendant-care limits to rein in medical costs related to crash injuries.
• stop non-driving related factors from unfairly impacting auto insurance rates.
• bring transparency to the Michigan Catastrophic Claims Association by making its rate-making data available to the public.
• aggressively tackle fraud and claims-handling abuse by creating a state fraud authority.

Legislators announcing the package included 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).

In addition to the bipartisan no-fault reform package, lawmakers also announced legislation to correct problems caused by two recent Michigan Supreme Court rulings. According to CPAN’s Cornack, both rulings were a “miscarriage of justice” that, if allowed to go uncorrected, will present “a serious threat to Michigan’s no-fault system.”

The first ruling, Admire v Auto Owners, has been used by insurance companies to deny no-fault benefits for legitimate expenses needed by car crash victims, including handicapped-accessible transportation and specialized food. Lawmakers have indicated they will introduce a bill to ensure that accident survivors will have these basic needs met.

The second ruling, Covenant Medical Center v State Farm, prevents medical providers from suing insurance companies on behalf of auto accident patients when insurers refuse to pay for medical treatment that has been rendered. The Covenant decision puts patients in the cross-hairs of litigation because medical providers are unable to pursue claims directly against insurance companies on behalf of their patients and, instead, will most likely have to file lawsuits against their patients for unpaid bills.

No Coverage Caps And Taxpayer Burdens

On the heels of announcing the Fair and Affordable No-Fault Reform Package, Detroit Mayor Mike Duggan and Michigan House Speaker Tom Leonard announced another no-fault reform proposal, House Bill 5013. The bill was sponsored by Rep. Lana Theis (R-42nd District).  The Michigan House of Representatives failed to pass House Bill 5013 on November 2, 2017, by a 63-45 vote.

House Bill 5013 placed caps on insurance coverage and, according to CPAN, would have cost Michigan taxpayers millions in new Medicaid expenses and would leave patients without care, while forcing them into poverty. In a nutshell, the proposal allowed Michigan drivers to purchase auto insurance policies that capped benefits at either $25,000 or $500,000. It also allowed drivers to purchase lifetime injury coverage.

However, the reality of the $25,000 option was this: a seriously injured individual’s full recovery would not have been covered because the lifetime PIP cap was $25,000, which would not pay for lengthy rehabilitation and possibly years of care and treatment. What may have been worse was that the $25,000 cap would also include wage loss, replacement services and survivor’s loss benefits.

House Bill 5013 also did the following:

• capped family-provided attendant care at 56 hours per week, which applied even if the patient requires 24-hour support.
• established fee schedules for medical providers. The fee would be set at the Medicare reimbursement rate.
• allowed those age 62 and older to opt out of PIP coverage and rely solely on Medicare. However, this ignored the fact that Medicare does not cover the long-term care needed by seniors recovering from a catastrophic car accident.
• created a fraud authority with a board represented by the insurance industry, law enforcement, prosecutors, one member of the general public and one Detroit resident. This authority would not have been subject to the Freedom of Information Act.
• mandated insurance rate reductions. Consumers who bought the $250,000 plan would have had their PIP premiums cut by 40% and would not have had to pay the $170 per vehicle Michigan Catastrophic Claims Association annual fee. CPAN warned, however, that motorists couldn’t count on these savings because the language of the proposal also let insurance companies make an exception if they could explain why the required rate reductions were not achievable.

CPAN’s legal team — George T. Sinas, Stephen H. Sinas and Thomas G. Sinas — issued a thorough analysis of House Bill 5013. They concluded the legislation would be “the end of no-fault as we know it” because:

• it would have shattered the availability of lifetime medical care and would “result in a severe loss of benefits for thousands of Michigan auto accident victims.”
• it gave “unprecedented control to government bureaucracy and insurance companies to determine and control the type of medical care and services that injured persons will receive under the No-Fault Act.”
• it gave “more power” to insurance companies, while taking away the legal rights of Michigan auto accident victims.

Furthermore, the CPAN legal team concluded that House Bill 5013 did not guarantee a reduction in auto insurance rates for two reasons:

• the premium reduction required by the legislation applied only to the premium for PIP benefits — not to the total premium, which, in reality, is comprised of coverages far more costly than the premium for PIP benefits.
• no premium reduction was necessary if an insurance company could convince the Insurance Bureau that the failure to reduce the premium was “justified” by “using generally accepted and reasonable actuarial techniques.”

The CPAN legal team also noted the proposal was similar to legislation that failed several years ago, which also capped coverage. Regarding that failed proposal, a 2011 Public Sector Consultants report found that capping no-fault benefits would result in a cost shift of $30 million to Michigan’s Medicaid system — in the first year alone.

“If we want lasting reform that brings real savings for drivers and the state of Michigan, then we need a comprehensive, bipartisan solution that addresses the core issues behind the excessive rates,” said CPAN’s Cornack. “We think the Fair and Affordable No-Fault Reform Package is a better, more responsible solution that makes real and lasting reforms without increasing costs to Michigan taxpayers, and without taking away coverage for catastrophic accident victims.”

Have you been injured in a Michigan car accident? The Sinas Dramis legal team is available to answer questions about no-fault insurance benefits or a possible auto negligence claim. Contact our Lansing auto accident lawyers and Grand Rapids car accident attorneys today for a free initial consultation.

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