Insurance companies want reform, too
Recently The Daily News published a very well-written article pertaining to the failure of Michigan’s automobile no-fault insurance reform. The letter mentioned that insurance companies are against reform. Actually, that is not the case. As a member of the Michigan Independent Insurance Agents Association, I contacted them in Lansing to clarify their stance on this issue. To save time and space, I will provide a portion of their reply as follows:
“The property and casualty insurance industry of Michigan has supported common sense reforms to our Michigan No Fault System since the early 1990s (PIP choice, medical fee schedules, anti-fraud measures and attendant care reforms). We worked diligently with the speakers and others in leadership to support passage of House Bill 5013, hoping we could correct any deficiencies through the process. Despite its imperfections, House Bill 5013 implemented a host of cost-saving reforms, which delivered real and substantial savings to Michigan consumers, at their option, not a one-size-fits-all state mandate.
“The reality is the bill would have guaranteed a PIP reduction of up to 40 percent annually for five years, would have reined in overcharging by health care providers without reducing no-fault benefits, would have limited excessive attorney fees which incentivizes auto no-fault litigation, gone after insurance fraud in an organized manner and given consumers a real choice on purchasing the auto insurance coverage they actually need and can afford, as offered in every other state.
“Are we happy that the reform failed? No. The Michigan consumers are the real losers in this battle as they are forced to purchase a product that state mandates unlimited medical benefits, permits excessive overcharging by the health care industry, does little to combat obvious fraud in the system and forces law-abiding, premium-paying customers to fund the unlimited benefits of those knowingly insured.”
As a side note, I know of a Michigan auto insurance company that is still paying bills in regard to an auto accident that occurred back in 1974. This company in particular is definitely anxious for no-fault reform.