Detroit mayor sues Michigan over high no-fault auto insurance rates
Duggan, joined by eight motorists across the state who are also plaintiffs, filed a lawsuit Thursday in
The lawsuit, against
It then wants the court to give the state six months to amend the law so that rates will fall. And if the state can't fix no-fault in that time, Duggan's lawsuit says the court should declare no-fault "null and void" and revert
Under a tort system, the Democratic mayor said he thinks auto insurance rates in
Duggan's lawsuit reads as an indictment against the no-fault system for leading to runaway medical costs, unchecked greed and fraud and a surge in recent years of auto accident-related litigation.
Under
The costs to
A spokeswoman for the
Failed bill
For Duggan, the lawsuit could be considered a Plan B for lowering car insurance rates for Detroiters after the proposed no-fault overhaul bill that he championed was voted down in November by a 63-45 vote in the state
"I thought it was so obvious that the trial lawyers and the hospitals were ripping us off, that I would have no trouble convincing legislators to have a conscience and fix it," Duggan said Thursday at a news conference. "I no longer have faith in
That bill called for numerous controversial changes to no-fault, including restraints on medical provider pay and giving all
These health insurance benefits in no-fault policies, known as "personal injury protection," now represent the biggest portion of auto insurance premiums in
"My friends over at DMC and
Critics of last fall's Duggan-backed insurance overhaul bill said it could have led to the end of the no-fault system and its valuable safety net for catastrophically injured people, who might otherwise end up in Medicaid-paid nursing homes instead of receiving the quality in-home care now available.
Under the bill, those who exhausted their no-fault coverage options would have had to fall back on regular health insurance.
Landmark case
The lawsuit filed Thursday hinges on a 1978
The state Supreme Court in that case gave the Legislature and governor 18 months to correct no-fault's problems.
Duggan's lawsuit says the car insurance rates problem has only grown worse since then, and is therefore unconstitutional.
A report by The Zebra, an insurance comparison website, found that
The city of
Last year, the
CPAN disagrees
The Coalition Protecting Auto No-Fault, a group of medical providers, patient advocates and trial lawyers known as CPAN, issued a statement that called Duggan's lawsuit a political stunt that wrongly blames no-fault instead of insurers for the high premiums.
"CPAN is deeply concerned about the lawsuit that aims to make sweeping and potentially devastating changes to
Attorney
"The mayor's lawsuit doesn't in any way attack the real problem here, which is a rate-making structure that allows rules to be utilized by the insurance industry that are inherently unfair and discriminatory," Sinas said. "The mayor doesn't say anything about that, and by not saying anything, he implicitly blesses the practices of the insurers."
Sinas also said that he suggested to a top
"This lawsuit could have asked for the insurance bureau to conduct a hearing and determine whether all of the rate-making practices being used by insurance companies today are fair and equitable," Sinas said. "I suggested that, but was essentially laughed at."
Duggan's lawsuit contends that no-fault became unconstitutionally unaffordable in
Speaking with reporters, Duggan said that his policy preference is for no-fault insurance to completely go away.
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"The only place in America that says no matter what other health care you already have, you have to pay double when you buy your car insurance, is
The other eight plaintiffs in the lawsuit are:
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Contact JC Reindl: 313-222-6631 or [email protected]. Follow him on Twitter @JCReindl.
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