No-Fault Insurance in Michigan Under Question…Again
Without a doubt, Michigan’s no-fault auto insurance law is one of the most unique — and controversial — laws in the state. If you’re severely injured in a car accident, the benefits you can receive under the Michigan no-fault law are absolutely priceless. But others see the law as being the reason for the fact that Michigan has the highest auto insurance rates in the country, making it prohibitively expensive for many people to have.
Michigan no-fault law has come under a lot of scrutiny in recent years. Lawmakers have repeatedly tried to reform the law without success and they’re starting 2018 with yet another attempt at it. But this time around, their approach is a little bit different. Previous attempts at no-fault reform have focused on changing the law and placing limits on coverage, but House Bills 5517-5519, introduced in February 2018, would repeal the no-fault law and replace it with a full-tort law similar to the one currently in place in Ohio. In addition to that, there’s another proposed bill, known as the “Macomb Solution,” which suggests completely dropping the requirement that drivers have auto insurance.
Whether or not these bills will go anywhere remains to be seen. In the case of the bill that would repeal Michigan no-fault, even the legislators who sponsored the bill don’t have much confidence that the proposal will go very far. Representative Aaron Miller of Sturgis was quoted in Crain’s Detroit as saying, “I’m not unrealistic about its chances — I don’t think it has any chance.” But Crain’s points out that what the legislators might be trying to do is use these bills as a way to get some of the parties involved in the debate, such as healthcare and insurance providers, to start agreeing to changes in the system.
Michigan has had its no-fault insurance law since 1973 and while Michigan isn’t the only state in the country to have no-fault laws in place, Michigan’s law is unique because it provides more coverage than anywhere else in the country. In the state of Michigan, all drivers are required to carry no-fault insurance and if a person is injured in a car accident, their own insurance company will pay for all of their medical bills, treatment, and property damage. Unlike in other states, Michigan has unlimited coverage for medical expenses and treatment related to the accident. If a person is catastrophically injured in a car accident and needs medical care and treatment for the rest of their life as a result, that’s covered under Michigan no-fault.
Several other states started using no-fault laws in the 1970s and the goal behind it was to make it easier and faster for injured people to get the care they need. Rather than having the parties involved go to court to determine fault, which could be very time consuming, the people involved just make their claims through their own insurance company. Michigan’s no-fault law also limits the circumstances in which a person injured in a car accident can sue the other driver’s insurance company for damages. For example, your insurance policy would cover damages with a specific monetary value, like medical bills or car repair, but if you wanted to collect for pain and suffering, that would be something you could go after the other driver’s insurance company for.
If House Bills 5517-5519 were to pass, repealing Michigan’s no-fault law, Michigan would become an at-fault, full tort state. People would be able to choose the level of auto insurance coverage they want and rates would be based on the individual’s driving record.