MI Trying To Find Ways To Reform No Fault Law

Michigan is a state that has the highest car insurance premiums. This is mainly due to the fact that it is classified as a no fault state. This means that no matter which driver is at fault, the insurance companies will pay the money needed for the insurance claims for each driver and victim that was involved.
The system has helped many accident victims be able to afford the medical care that they desperately need. For example, a couple’s 18 year old son was involved in a car accident that left him unable to care for himself. Because of the no fault law that is in place, mother was able to quit her job and become his around the clock care giver. The mother gets paid for her services from the car insurance company and the state because she is a certified nurse.
Now, this may not be an option for parents because the state’s no fault laws may soon be facing reform efforts. The state’s leading politicians have said that the no fault system is not financially sound. There are a lot of claims being filed each year and without a benefit cap in place, the system could end up going bankrupt.
Drivers in the state of Michigan pay a lot of money for their car insurance premiums already. If cost cutting measures can be employed, then hopefully the entire no fault system will not have to be scrapped in the future.
 
There are currently only twelve states in the country that still have no fault laws in place. Michigan had its law created in 1970 and it has been helpful to get care for car accident victims. However, allowing there to be unlimited PIP protection in place is very costly. The law has mandated that each driver buys unlimited personal injury protection coverage even if they do not want it. The coverage provides all drivers with $500,000 worth of medical coverage. Once a driver crosses this threshold, then the Michigan Catastrophic Claims Association has to pay out the additional funds.
Currently, this fund only has 13 billion dollars left to pay out for car insurance claims. However, they will go into debt because they currently need more than this amount to cover all of the outstanding insurance claims. One idea is to allow drivers to play a role by allowing them to pay for coverage based on different levels from $500,000 to $5,000,000. The higher the amount desired, the more a driver would pay in PIP premiums. HB 4936 has been proposed as a way to find some common ground so that accident victims receive benefits and care while not exhausting all of the resources that are available. Hopefully, the measure can help the no fault system stay afloat.