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In The News

Tuesday, June 25, 2019

Michigan's No Fault Auto Insurance Reform: "Get Ready" to Get Screwed

By Michael Nichols
Categories: Mathew J. Heos

The Temptations had a hit called “Get Ready.” This quintet is an emblem of Michigan’s “Motown” sound that rocked and rolled the world about 5 decades ago. In fact, the story of The Temptations is a smash broadway hit. The Temptations had something prophetic to announce and it coincidentally relates to an industry which with their hometown has walked hand-in-hand through history: the auto industry … and auto insurance.
Michigan drivers have been squeezed by the insurance industry for years. Insurance companies make big bucks at the feet of the no-fault laws, passed blithely by unwitting legislators. Rates skyrocketed; especially in Detroit. People complained. Billionaires; trying to draw people back to Motown to live in their homes and million dollar developments, blamed the no-fault auto insurance law. The insurance lobby was quick to frame the debate, placing the blame for high premiums on the most seriously injured people – those who need 24 hour per day, 7 day per week, attendant care. Meanwhile, the insurance companies were charging customers based on their credit scores, zip codes and other non-driving factors. For example, people living in Detroit were automatically charged more points in their rating due to their zip codes. This practice is known as red-lining.

Governor Whitmer signed SB 1 into law May 24, 2019 under pressure from multiple interest groups.The groups include those led/started by billionaire Dan Gilbert. He founded “Rocket Mortgage.” Importantly, Michigan drivers had been squeezed dry and any savings would be welcome – even if they must sacrifice the benefit guarantees they would need if seriously injured in a crash.

SB 1 is as unnecessary as it is wordy. The Legislature could have outlawed non-driving factors, rather than allowing the insurance companies to use other non-driving factors to influence premiums. That’s exactly what the bill STILL does. Census data is just as irrelevant as FICO scores – it’s just another way for insurance companies to discriminate against Michigan drivers. Check out this video to see how insurance companies gouged you (gauged you?) before SB 1. Nothing in SB 1 will prevent insurance companies from using similar methods, using US Census data, to segregate Michigan drivers again and increase their premiums over time. That is what we had before “auto insurance reform” and it is what we will have after ….

What is foreseeable is that Michigan drivers will see some cost savings in the short term, but ultimately, they will face gradually rising premiums over the long term. Also, this law is full employment for attorneys because SB 1 gives insurance companies more power then they had under the old law.

Some aspects of SB 1 are beneficial, including section 3135, which codified the McCormick v Carrier decision. However, if a driver selects $50,000 in medical coverage and their health insurance carrier pays for hundreds of thousands of dollars in medical expenses over $50,000, the driver could be liable to refund those expenses out of a recovery for bodily injury.

McCormick overruled a poorly decided case called Kreiner v Fischer, 474 Mich 109; 683 NW2d 611 (2004). That case imposed a component to the former section 3135 of the no fault statuute that did not actually exist in the statute. McCormick righted that wrong decision, and now, the essence of that decision –relaxing some arbitrary procedural issues -- has been codified. The nature and extent of a Plaintiff’s serious impairment of body function or permanent serious disfigurement is one for the jury. The Plaintiff has the burden of proving that the injury was objectively manifested and that it impaired an important body function or permanent serious disfigurement. SB 1 codifies the definition of serious impairment of body function in the act’s definitions.

Whatever your opinions on the prior state of Michigan No Fault law, we have crossed the threshold into a new era. The Nichols Law Firm, PLLC is here to answer all of your Michigan No Fault questions and represent you in your case! Call today 517-4323-9000. Email Matthew Heos at mheos@nicholslaw.net or Wendy Schiller-Nichols at wsnichols@nicholslaw.net

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Peer Recognition

Mike Nichols is a national leader in drunk driving defense. He is a member of the Forensic Committee and Michigan delegate to the National College for DUI Defense. He is also a Sustaining Member of the College. Nichols is also a founding member of the Michigan Association of OWI Attorneys; a member of the American Chemical Society; an associate member of he American Academy of Forensic Science, Adjunct Professor of Forensic Evidence in Criminal Law and OWI Law and Practice at Cooley Law School. He is also author of the West OWI Practice book and several chapters in other books on science and the law.

Mike Nichols is recognized by his peers in Michigan as a “SuperLawyer” in DUI/Criminal Defense. Nichols has also been asked to speak at conferences by groups such as the NCDD; Various Bar Associations in other states.