Michigan is running into the same kind of problems as Florida with their no-fault car insurance program. According to Insurance News Net’s “MI Mulls How To Fix ‘Unsustainable’ No-Fault Auto Insurance System” from A.M. Best, Michigan’s Catastrophic Claims Association is stretched far too thin. This Association pays for any catastrophic injuries from car crashes which exceed $500,000 because drivers in Michigan are required to purchase car insurance that gives them unlimited medical benefits over their lifetime.
After the Insurance Commissioner deemed the MCCA ‘unsustainable’, the Insurance Committee came up with a plan to make some changes to the law and bring about a tier system. Instead of unlimited medical benefits, drivers could choose to pay for a limit of $250,000; $500,000; $1 million; or $5 million. This has put many Michigan residents up in arms and has even caused protestors to come to the state capital. However, even the lowest level of no-fault coverage, from a company like Estrella Insurance, ties New Jersey as the best plan in the United States.
The state is already having financial difficulties and the MCCA going bust would be very bad for Michigan. Opponents would like to see how the MCCA is spending their money because they lack transparency to the general public. But some states have just been getting rid of no-fault coverage all together recently as a cost cutting measure. As car insurance increases force some drivers to drive uninsured and medical costs skyrocket, it is clear that there needs to be some kind of reform to the no-fault system. Voters in Michigan have twice rejected reform on the ballot, so they most likely won’t agree with getting rid of no-fault coverage completely, but they may be convinced that reform is necessary.
