Are You Adequately Protected By Your Car Insurance Policy?

I interviewed Attorney Jody Lipton about what Michigan No Fault Insurance policies must cover, and what you can do to increase your protection in the event of an auto accident. Jody is a partner in the personal injury firm of Lipton Law, located in Southfield. For more information, visit their website. Jody is leading a free class called "Crash Course" on October 18 from 7:00-8:30pm at the Community House in Birmingham. Protect yourself, your family and loved ones by finding out what those numbers on your Auto Declarations Certificate really mean. Class registrants are strongly encouraged to bring along their own coverage certificates so that they can compare what their coverage is to what their coverage should be. Click here for more information and to register for the class.

Additionally, I've shared the latest information about Senate Bills 293 and 294, which were recently merged into House Bill  4936, due to opposition from the public. House Bill 4936 also seeks to limit benefits for seriously injured auto accident victims.

The Basics:

Michigan no-fault insurance laws require all drivers to carry a basic minimum of $20,000 in auto insurance. The insurance pays for medical bills and other costs if a driver or passenger is injured in an auto accident, regardless of whose fault the accident was.

Since no-fault insurance is meant to cover most types of car accident injuries, Michigan drivers injured in auto accidents are generally not allowed to sue a driver who caused the accident, unless the driver or passenger suffered a permanent disfiguring scar, serious impairment of a body function, or was killed.

A basic Michigan No Fault Insurance policy has three parts:

• Personal injury protection: This is commonly known as PIP, 1st Party or No Fault benefits and covers certain benefits if someone is injured in a motor vehicle accident – regardless of fault. If an individual is injured in an accident where a motor vehicle is involved, the No Fault insurance company shall pay for lifetime medical benefits for accident related injuries; reimbursement up to $20 per day for three years for help with household chores (called replacement services); payment of lost wages at a rate of 85% of what the injured “would have earned” during the first three years from the accident; payment for medical related transportation; and payment to family members or friends to take care of the injured victims personal needs, commonly called “family provided attendant care.”  Qualifying persons would also be able to obtain modified housing if necessary, medical transportation services, and medical equipment, as needed.

• Property protection: This coverage pays for damage to other people’s property that occurs in an accident. For instance, if a driver crashes into someone’s fence, property protection pays for fence repair. It does not cover damage to the car, however.

• Residual liability insurance: This coverage protects against damages in lawsuits. It pays if a driver kills, seriously injures, or permanently disfigures another driver, or if the driver causes an accident in another state.

What you can do to increase your protection in the event of an accident:

Ms. Lipton advises all Michigan drivers to have uninsured motorist coverage and underinsured motorist coverage.  "However the policies can be very confusing and an insured who doesn't follow all the steps required can easily void their coverage in the event of an accident. There are loopholes that are not in the insured driver's favor, so it is advisable that they read all the fine print and have an experienced no fault attorney advise them of their rights as soon as possible after an accident."   Ms. Lipton is happy to advise clients of their rights before an accident too, which may have the effect of them changing policies or increasing coverage once they are aware of their rights and limitations under the policy.

Each person has to decide for themselves what amount of insurance coverage is adequate.  Cost of the policy, value of the car and other assets, income level of the insured may all factor into one’s decision about how much insurance to purchase. Moreover, with legislation pending that seeks to limit benefits for accident victims, Ms. Lipton believes the public should become educated about these issues and if the Bill advances, tell their senator and state representative to vote No on House Bill 4936.   For additional information about these bills and their ramifications, read:

• Michigan House and Senate Introduce Cost-Saving Insurance Reform for Motorists;
• Opposing points of view:  No-Fault changes will cost hospital jobs, hurt care for victims, offer no guaranteed savings;
• The Fight To Save Auto No-Fault;
• SB 293; SB 294; HB 4936;
• Coalition Protecting Auto No-Fault;
• Brain Injury Association of Michigan

To Help Save Benefits for Accident Victims:

1.  Encourage your representatives to Vote NO on House Bill 4936 and other related auto no-fault reform, as they will significantly impact services for seriously injured auto accident victims. (Go to MichiganVotes.org to find your representative, and to comment on the Bill).

2. Learn more about this legislation and how it will impact accident victims (visit www.cpan.us for information).

3.  Share your personal story with your representatives.

4. Contact your local media outlet to share your personal story.

5. Write a letter to the editor of your local paper discussing the impact of House Bill 4936.

6. Get involved with CPAN (Coalition Protecting Auto No-fault, www.cpan.us).

7. “Like” CPAN’s Facebook page (facebook.com/ProtectNoFault).

8. “Like” your state senator and state representative’s Facebook page (search for their name in Facebook).

9. Post information about House Bill 4936 on your personal Facebook page, Twitter account or blog to participate in the conversation.

10. Share this list with your family and friends and encourage them to help.

11. Sign this petition opposing changes to Michigan's No fault Law: http://signon.org/sign/dont-change-michigans?source=s.fwd&r_by=575192

Uncovering the Myths of Michigan Auto Insurance:
(Courtesy of the Coalition Protecting Auto No-Fault)

Myth #1: Michigan’s auto insurance system is broken.

FACT: Michigan’s 35-year-old auto no-fault system offers the best coverage in the nation at a cost that within the national average* for the majority of drivers. It significantly reduces lawsuits while providing full injury and rehabilitation benefits for as long as the injury persists.

Myth #2: Michigan’s requirement that all drivers carry full injury and rehabilitation insurance is driving up the cost of auto insurance in Michigan.dddfg

FACT: It costs more to insure the vehicle than it does the people in it. The cost of collision coverage accounts for about 60 percent of an auto insurance policy, compared to less than 30 percent for personal injury protection.

Myth #3: Reducing injury and rehabilitation benefits will lower insurance rates.

FACT: Insurance companies refuse to guarantee savings in exchange for reduced benefits. In fact, taking away full injury and rehabilitation benefits would increase lawsuits* and drive up insurance costs. More drivers would be forced to purchase additional coverage to protect themselves from underinsured drivers, and accident victims would be forced to sue the at-fault driver to recover the cost of their injuries.  (*Source: Michigan Courts, Circuit Supplements Statewide, 2000-10)

Myth #4: $50,000 in injury and rehabilitation coverage is all that is needed.

FACT: When the costs of emergency medical care, hospital bills, doctors’ fees and rehabilitation are taken into account, the final bill for a serious auto accident can cost millions of dollars*. Seriously injured accident victims who purchase the proposed minimum coverage would then be forced to pay out of their own pocket or sue the other driver.

Myth #5: Insurance companies want to offer reduced injury and rehabilitation coverage so drivers who otherwise could not pay for insurance will be able to afford it.

FACT: Taking away full injury and rehabilitation benefits will allow insurance companies to shift their costs onto the backs of taxpayers. Seriously injured accident victims who purchase reduced injury and rehabilitation auto insurance would be forced to find alternative sources for their care*, such as welfare programs like Medicaid, to pay for their care. (*Source: Assumption based on past Michigan Catastrophic Claims Association reported claims and fact)

What is the status of auto insurance laws in Michigan?

For the past 35 years, Michigan’s auto insurance system has provided full injury and rehabilitation benefits to auto accident victims for as long as their injuries persist. This has saved a countless number of people from turning to taxpayer funded programs to pay for their injuries.

What changes are being proposed?

The insurance industry wants to limit your injury and rehabilitation auto insurance benefits (known as Personal Injury Protection), which they say will save drivers 15 percent on the Personal Injury Protection portion of their premium.

What’s wrong with the insurance industry’s plan?

Reducing full injury and rehabilitation benefits is bad for drivers, bad for taxpayers and bad for Michigan.

• The insurance industry REFUSES to guarantee cost savings in exchange for reduced benefits.
• Drivers will have to purchase MORE insurance to protect themselves from underinsured drivers.
• Seriously injured drivers will be FORCED onto welfare programs to pay for their care once their auto insurance hits the proposed limits, which our state cannot afford.

Points to Ponder and Share:

• Have you or a close friend or family member ever been seriously injured in a car accident?  If so, how did it change your/their life?
• What is your view of the pending no-fault legislation?
• What, if anything, will you do or change about your current auto insurance after reading this blog?