Michigan has a unique auto insurance system and changes in this system of coverage for people who are injured in accidents, is likely to come up for debate in the Michigan Legislature.
As of now, Michigan is the only state in the whole of US, which mandates unlimited coverage for those who have suffered catastrophic injuries in a motor vehicle accident. Currently, there are proposals to offer auto insurance that is less expensive in exchange for limited PIP coverage.
Those who are in support of bringing about this change (including auto insurance providers themselves) state that this would help motorists to opt out of the more expensive coverage, which they don’t want or cannot afford. Auto insurance providers are also looking for some kind of relief, since the entire system is turning out to be increasingly expensive and is also threatening their finances as well.
Sen. Joe Hune, Chairman of Senate Insurance Committee and Republican from Hamburg Township in Livingston County, has stated that the cost of this whole system seems to be skyrocketing due to the high medical costs. This is a system that will not be able to sustain itself and is likely to reach a tipping point very soon, he added.
However, opponents of this proposed legislation claim that this is a threat to the financial stability of the no-fault system that is followed in the state. They claim that motorists who opt for less coverage may end up being underinsured and may hence get themselves into serious trouble financially in case they suffer serious injuries in an accident.
The proposal does not come anywhere close to meeting the requirements of those who are seriously injured, states John Cornack, who is the CEO of Ann Arbor-based Eisenhower Rehab Center, and president of Coalition Protection Auto No-Fault.
The entire coalition that is opposed to these proposed changes include health groups, hospitals, trial lawyers, as well as other organizations. The coalition is trying its best to lobby with auto insurance providers as well as business groups like the Michigan Chamber of Commerce, which wants an alteration in the system.
The proposed legislation will bring about significant changes to the coverage under state law for those who suffer catastrophic injuries.
At present, all policyholders in Michigan have to purchase unlimited medical benefits as part of the coverage. Coverage of up to $50,000 is handled by regular policies; however, the severe cases are covered and reimbursed by the Michigan Catastrophic Claims Association.
