HB 4936: Why I predict taking away No-Fault protections will fail to lower the price of auto insurance (again)

Yesterday, I discussed how HB 4936, recently proposed by Republican state Rep. Pete Lund, would likely serve as the framework for any future No-Fault “reform” legislation.

This proposed legislation has no safeguards to lower auto insurance premiums, even though it takes away valuable No-Fault PIP protections from Michigan citizens.

Comment: How many times have we been lied to in this state by auto insurance companies who have promised vast savings in return for savaging our No-Fault protections and benefits?

As an auto insurance lawyer, I saw the insurance industry make these promises in 1995, when then Governor Engler passed radical tort “reform,” and again in 2004 with Kreiner v. Fischer. Although third-party auto accident (pain and suffering lawsuits) dropped by half, and thousands of innocent and injured Michigan citizens had their claims literally thrown out of court under this new law (the nation’s harshest auto injury threshold law) — auto insurance premiums only went up.

Costs went down, accident claims went down, pay-outs went down, but insurance premiums continued to rise.

In 2005 and again in 2006, independent studies of Michigan’s insurance companies found that the rates Michigan insurance companies were charging were “excessive.”

The Anderson study: Impact of proposed PIP Choice Law in Michigan estimates that reducing PIP will cause insurance companies profits to increase by over $100 million a year.

Here’s my big problem with all of these bills: people are giving up incredibly valuable No-Fault protections (even if most aren’t even aware how important these are until it will be too late); but these sacrifices are being made without any built-in safeguards, protections, or guarantees to prevent insurance companies from continuing to charge excessive auto insurance premiums to Michigan consumers.

How many times are we going to be lied to before we realize that without any type of safeguards, there will be no incentive for the auto insurance companies to use these new higher profits to lower the price of auto insurance for us?

If auto premiums are not reduced, this will reinforce the downward cycle of forcing Michigan residents to choose the cheapest insurance coverage because of the high prices.  Those who need it most get hurt the most because of the high prices.

As I’ve written before, and as an insurance lawyer for nearly 20 years focusing on No-Fault insurance claims, the obvious answer - and protection for Michigan consumers - is to allow the Michigan insurance commissioner to regulate the amount of profits that insurance companies are allowed to reap for a product (No-Fault insurance) that we are forced to buy.

Insurance commissioners have this power in almost every state - except Michigan.

Incredibly, this one modification - which would drastically lower auto insurance premiums overnight while keeping the insurance benefits and protections of our auto insurance law intact - has been absent from any of the Republican sponsored legislative bills, including HB 4936, and SB 293 and SB294.

- Steven Gursten is recognized as one of the nation’s top auto insurance lawyers handling serious car accident and truck accident lawsuits. He frequently writes and lectures about Michigan No-Fault, and is available for comment.

Related information to protect yourself:

Show us the money from proposed changes to our No-Fault law

3 potential cases for Michigan auto accidents

Michigan’s current No-Fault Act and statues

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you. Call (800) 777-0028 for a free consultation with one of our insurance lawyers.

Michigan Auto Lawyers

Taking pictures after a Chicago accident always a good idea, but before?

Next » Posted On: March 11, 2011 by Dave Abels

Our Chicago car accident lawyers encourage those who have been in a serious accident to gather as much evidence at the scene as possible. This often includes photos taken by you or a relative, which can be invaluable in fighting for your rights long after a crash.

Now you can record video in real time ... just in case. As we continue to report technologies impact on driving safety -- both the good and the bad -- the story of a Knoxville man who used a cell-phone app to help track down a hit-and-run driver is certainly out there on the cutting edge.

Nic Bender's vigilance might be a bit extreme, but it certainly proves the technological point. He had just dropped his kid off at daycare when he was sideswiped by a passing sedan that didn't stop. Other drivers might have been flummoxed. But not our Nic. He had decided to use a smartphone application called Daily Road Voyager ... just in case.

His cell phone attaches to the car windshield and the application records his commute. Knoxville police say the resulting video is legitimate evidence that will be used as part of the investigation.

"Technology is changing, so we do expect to see more of this in the future," Knoxville Police spokesman Darrell DeBusk told NBC10 News. "It is getting to the point where you cannot go out into public without the possibility of being recorded by someone."

We're not sure Chicagoans are going to record their vehicle's every move just in case they are involved in a fender bender -- but we are not so sure the technology won't be standard equipment installed by car makers in the not-too-distant future.

As a general rule, motorists in an accident should take pictures of the scene whenever possible. Such evidence can prove useful if a lawsuit results. Road conditions change. Weather changes. Vegetation may grow or be trimmed back. Buildings may be constructed or torn down. Street signs or signals may be removed or added.

Gathering as much information from the scene -- including the names and contact information of any witnesses -- is always a good idea.

Nic's just a step ahead of the rest of us.

Those involved in a car accident in Chicago or the surrounding area can contact Abels & Annes for a free and confidential appointment to discuss their rights. Call (866) 99-ABELS. There is no fee unless you win.

Posted by Dave Abels

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