Michigan House Should Pass Auto Insurance Reform Bill
State lawmakers are poised to take a huge step towards reforming
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The main impetus for reform is that auto insurance costs are out of control. According to a new analysis by
A key reason for these astronomical costs is
Additionally, there is no corresponding fee schedule used for medical providers. Absent a fee schedule, hospitals and other medical providers can and do charge auto insurers as much as they think they can get away with, which leads to the bizarre fact that treatment for injuries sustained in car accidents costs three to four times more than the very same treatment for injuries incurred some other way.
"There are several significant problems with
HB 5013 would allow drivers to choose a level of coverage that better suits their needs. Drivers could still purchase the current unlimited amount of coverage if they choose, but they could also opt for a
Despite these clear improvements in HB 5013, lawmakers are also considering a competing package of bills that would modify
The bill package, House Bills 5101-5111, contains several bills that are aimed at making it easier for trial attorneys to sue auto insurance companies and to win those lawsuits. Insurance companies, who regularly pay out more in claims than they receive in revenue from premiums, would have to add the price of this increased risk of being sued into their premiums and drivers would pay more.
"At the end of the day, this competing package of bills may actually increase premiums for drivers," Van Beek said. "The vast majority of people will never feel the need to sue their insurance company, so making it easier for trial attorneys to do so at drivers' expense is not dealing with the fundamental problems of the status quo."
To learn more about auto insurance reform, please visit: http://www.mackinac.org/insurance
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