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IPS / Lighthouse Insurance Group Blog: michigan no-fault

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AutoWe all know that auto insurance in Michigan is expensive. In fact, according to the National Association of Insurance Commissioners, our premiums auto insurance premiums rank 7th highest in the country.  SB-248 has passed the Senate Insurance Committee and the House Insurance Committee, and sill soon come to a congressional vote.  If passed, the framework will be in place to lower Michigan's auto insurance rates.

One of the largest issues has been a combination of Michigan's unlimited medical benefits coupled with auto insurers being required to pay-as-billed for medical services.  Other medical payers, such as health insurance companies, pay medical providers based on an agreed schedule of fees - as is the case with PPOs or HMOs.  Others such as workers compensation and Medicare pay providers based on a schedule enacted by law.  In contrast, Michigan auto insurance companies have been required to pay whatever they're billed by the providers, often being three to four times more that what other types of insurers pay for the same treatment. One element of SB-248 would establish a fee schedule to enable auto insurers to pay amounts similar to that of other health insurance companies.  This will not change the medical services available - only the amount auto insurance companies will have to pay for them.  Still, there will be no maximum limit or cap on what can be paid...only that along the way, amounts paid will become reasonable and in line with other types of insurers.

SB-248 will provide for an Insurance Fraud Authority to go after schemers who abuse our no-fault insurance system.  Michigan's unique unlimited lifetime no-fault medical benefits have led to increasing fraudulent claims.  According to a study by Hillsdale Policy Group, auto insurance fraud costs an estimated $400 million.  Michigan is only one of eight states without a fraud authority to investigate and prosecute fraud, according to the National Insurance Crime Bureau.

SB-248 still provides for reimbursement for non-skilled family-provided care, but limits payment to family members to $15 hour and no more than 24 hours per day.  That's still $131,000 per year!  This limit doesn't apply if the family attendant is a licensed professional.

SB-248 proposes a $100 / car rate rollback on auto insurance policies.

SB-248 changes the Michigan Catastrophic Claims Association (MCCA) to a new Michigan Catastrophic Claims Corporation (MCCC) that will function differently and be more transparent.  The purpose of the MCCC will be to fund the portion of auto-related medical claims in excess of $545,000.  At present, the MCCA pays out over $80 million per month for catastrophic injuries.

The House Insurance Committee passed SB-248 today, April 23, 2015, by a 9-6 vote.

Changes in committee include a fee schedule that would pay 150% of costs allowed by Medicare, removal of the proposed $15.00 per hour limit on family member attendant care if the family member is a licensed medical professional, and a $100 per vehicle rate rollback.

The Bill now moves to the House - hopefully to be acted upon next week.

Senate Bill SB-248 was passed by the Senate Committee on Insurance by a narrow 21-17 vote on April 16, 2015.

This bill contains basic elements of prior attempts to change Michigan's o-fault auto insurance, including:
  • Creation of an insurance fraud authority
  • Family Attendant Care cost controls
  • Establishment of a new entity to replace the Michigan Catastrophic Claims Association, and
  • A payment schedule for medical costs stemming from auto-related injuries based on payments accepted by medical providers from other traditional health insurers.

The Bill not goes to the House Committee on Insurance.  If passed, this could lead to reduced auto insurance costs in the State of Michigan.


Auto ThiefDid you know?
 Premiums for comprehensive coverage pays for the theft of a motor vehicle.
 Installation of anti-theft devices reduce the chance of auto-theft and qualifies for a reduction in the comprehensive  insurance premium.

What you can do to help eliminate Auto Theft!
 Lock your car—half of all vehicles stolen are left unlocked.
 Take your keys—nearly 20% of all vehicles stolen have keys in them.
 Park in well-lit areas—car theft occurs at night more than half the time.
 Park in attended lots—car thieves don’t like witnesses.
 Don’t leave valuables in plain view—they may invite thieves to break into your car.
 Completely close your windows—don’t make it easy to gain access to your car.
 Don’t hide a spare set of keys in the car—the pros know where to look.
 Don’t keep your registration in your glove compartment. Thieves have just what they need if they steal your car. Keep it in your wallet.

MAKE IT HARDER ON THE THIEF
 Park with your wheels turned to-ward the curb.
 Always use your emergency brake when parking.
 If you have a garage, use it.
 If your vehicle is going to be un-attended for a long period of time, disable it; for example, remove the ignition fuse or coil wire.

Article Source Courtesy Michigan Millers Insurance Company
Image courtesy of Toa55 /  FreeDigitalPhotos.net

If you’re a parent with teenagers you know that the prom is a special night for your teen, and while you want them to have a fun and memorable night with their friends, you also want to make sure they stay safe.  If your teen is driving on prom night or riding with a friend who is driving, here are three things to discuss with your teen before the big night:

1) Driving under the influence. Automobile accidents are the leading cause of death among teens, with one third of those deaths being alcohol related, according to the organization Mothers Against Drunk Driving. Avoiding situations with alcohol and drug use is the best way to avoid driving under the influence or riding with someone who is under the influence. If necessary make arrangements to have a designated driver or call someone else for a ride. There are no consequences that are worse than injuring or killing yourself or others.

2) Distracted Driving. According to the FCC, distracted driving accounted for 16% of all fatal crashes in 2008 and 21% of accidents involving injuries. Distractions can include texting, talking on the phone and even scrolling through a playlist on an MP3 player. If your teen is going to be in a car on prom night, remind them that no text or phone call is worth injuring or killing themselves, their passengers and others on the road. If they need to call or text someone for directions or to let them know they’re on their way, tell them to pull into a parking lot or a safe area along the road with plenty of room between the vehicle and moving traffic.

3) Passenger Safety. Tell your teen that as a driver, they have a responsibility for the passengers in the vehicle. Make sure everyone has their seatbelts on before leaving and during all trips.  A driver should make sure that passengers don’t lean out of windows, throw things from a moving vehicle or engage in other horseplay. Remind your teen to never transport more passengers than there are seatbelts- an overcrowded vehicle is not a safe vehicle.

If you’re a parent whose teenager is getting ready for the prom, talk us at Insurance Planning Service - your Trusted Choice® independent insurance agent - about how your insurance coverage works with your teen, and make sure your teen understands the rules you set for them.  Call us at 800-220-5582 or contact us on the web today!
 

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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake