You are off base on this article. Offering to let consumers pick their PIP is opening agents up for UNLIMITED lawsuits for failure to provide the coverage the client needs or should have had.
Larry H – you are living in a fantasy world if you think a simple offer and rejction is all that is necessary — you still have to defend E&O claims, even when they are groundless. the whole point of no-fault insurance is that you have to carry your own coverage and not depend on who is at fault. If no PIP, then you have “tort” – if auto claimant can’t get coverage from their own policy, can’t get it from the at-fault driver then they are going after the deep pocket of their agent that they rejected the coverage and didn’t understand what they were rejecting.
As someone that is both an insured in Michigan and works for an insurance company, I don’t mind paying the MCCA assessment each year ($146 as of 7/1/2010) because this is a small price to pay for UNLIMITED (i.e. infinity) medical benefits in the case of an auto accident. Although it is not a perfect system, when someone is injured in an automobile accident in Michigan, we do not have to worry about who is going to pay the medical bills. The bills can get into the millions if someone is severely injured (catastrophic). The $5,000 to $50,000 that some states mandate in medical expense coverage would only scratch the surface. Not all people have employer provided health insurance so this acts as a way to protect everyone since automobiles are the primary form of transportation for the majority of the people in this state (and the rest of the country).
As one of the original designers and developers of No-Fault back in the early 1970s, the concept of unlimited medical benefits was well received in a number of states, and continues to serve the public well. Don’t let the relatively few who “milk” the system (including lawyers) ruin a good thing for the general public. And no, simply offering better than base benefits doesn’t work – they still sue agents and recover – take it from one of the most frequently retained insurance litigation expert witnesses in the country. Stay with what you have.
What the article fails to mention is the most health insurance contracts in MI have a no fault exclusion and are excess over the auto coverage. This was becoming the standard practice when I left the state 10 years ago. At that time the MCCA charge was $12 and some change a year! Letting the public choose is not the answer. The answer is forcing reduced charges for the services that drive up the insurance costs. Cost of repair, Dr fees, hospital charges etc. They are trying to treat the result and not the cause of the increased costs.
This artical takes a very superficial look at at complex subject. MI has the best insurance in the country, maybe the world. Some points to consider:
If you have a catastrophic injury, say your a quad, you are going to loose your work provided insurance, but your Auto carrier will cover your acct related issues for life.
Detroit has high insurance cost, because they have a crime problem, theft is rampant and traffic laws are not obeyed, causeing more accidents. Also, their courts often make unreasonable rulings.
MI should modify their law to allow the federal government to have to contribute to the cost of a catastrophic victims injuries. In every other state people end up collecting Medicade benefits to cover their injury. MI vehicle acct victems never have to go to the Fed for payment.
Well theres more but you get the point.
I’ll keep my champagne thank you!
Michigan PIP should be a choice, actually we should just go to plain old medical payments on the policy and the driver purchasing the insurance should chose what they want, if any.
The majority of the states in this country ARE NOT PIP states, Michigan is the only state with UNLIMITED PIP coverage. I do agree that the coverage is great, but the price is ridiculous!
And to John O who is scared of E&O Claims, if you offer the coverage and explain it like a good little insurance agent should do, then you wouldn’t have to worry about e&o claims. What are the agents in states where e&o isn’t available or an option doing? Being sued everyday?
Give us a choice — Insurance Agent E&O is available in every state. E&O claims do happen all the time and yes, the E&O insurance will defend the agent when a serious accident occurs and the customer has declined coverage, but the cost of the defense, the time to defend, the loss of claim free credits and the lost time to the agent to continue to practice their profession is a very high cost. The point is – control the cost of the auto claims to control the cost of the insurance. You are right – Michigan has a unique program for unlimited PIP. It was originially set up to mirror workers compensation, but does not have the cost containment controls that WC has so cost of a claim is many, many, many times higher in Michigan than in other states.
Whatever is decided, agents need to know that this will become an e&o issue. After the fact is always when an insured is sure they would have paid whatever amount to purchase what they needed. As always it will be up to agents to document with signatures what the insured bought and that they understood what they bought. The understood part as always – the most challenging.
Remember when our legislators got in the middle of the MCCA funds back in 90’s. They decided to “return premium” back to insured’s because they thought the MCCA was overfunded. Typical governmental intervention!
Aren’t there a few issues here?
FIRST: cost of medical and rehab services. Since MediCare and WC adopt fee schedules, and there appear to be non e for MI PIP, wouldn’t it make a lot of sense to institute same fee schedules and oversight as on WC or MediCare? I am sure that the health providers, being squeezed in other areas, are looking at PIP as the new goose that laid the golden egg
SECOND: there is a strong point to the fact that other states dump off costs to MediCare and MediCaid and SS disability…CA indicates in their studies that 44% of the MediCare claims paid are really as a result of unfunded WC claims…imagine if this ever got all sorted out so we could see the true costs of all this
THIRD: our healthcare system in this country is an abysmal mess with true costs not known since so much of the costs are shifted. Regardless of what you feel about the Healthcare Bill, at least we are opening up the debate. Now, if we can only stop political name calling and get down to the REAL problems of too much cost, overutilization, too much prescribing, not enough preventative medicine, etc., etc., etc. maybe we could carve out a better way for all loines of coverage and the public at large.
Wiser1 you are right. The republican candidate who was elected to be the governor was John Engler. He followed throught with his promise to return the funds to the policy holders. The democratic candidate if elected was going to take the MCCA funds and move them to the general fund. The result was the MCCA fund was depleted. Gotta love those politicians.
The problmem is we demand too little of our governments and don’t hold them to task when they don’t deliver. They have conditioned us to have low or no expectations.
It is especially heart wrenching when we have serious, serious issues and we have only Tweedle Dee Dee and Tweedle De Dum for choices
Only the rich can run pretty much and the days of the “citizen patriot” are clearly over, replaced by swelled heads with their hands out.
I agree with Michigan Agent, our politicians on both sides of the party lines make dumb decisions when it comes to the MCCA fund. The money should not be returned, nor should it be refunded. It should be kept in the fund and used ONLY for its intentional use. If it grows, great! Then the MCCA assessments would move towards zero and the costs for each Michigan policyholder drops. Yay!
Dear Insurance Journal:
You are off base on this article. Offering to let consumers pick their PIP is opening agents up for UNLIMITED lawsuits for failure to provide the coverage the client needs or should have had.
Great for the legal industry bad for agents.
Good article… the point is right on.
John O, if you want to avoid an E&O issue, just make sure you offer the coverage and let the insured make the buying decision.
Larry H – you are living in a fantasy world if you think a simple offer and rejction is all that is necessary — you still have to defend E&O claims, even when they are groundless. the whole point of no-fault insurance is that you have to carry your own coverage and not depend on who is at fault. If no PIP, then you have “tort” – if auto claimant can’t get coverage from their own policy, can’t get it from the at-fault driver then they are going after the deep pocket of their agent that they rejected the coverage and didn’t understand what they were rejecting.
As someone that is both an insured in Michigan and works for an insurance company, I don’t mind paying the MCCA assessment each year ($146 as of 7/1/2010) because this is a small price to pay for UNLIMITED (i.e. infinity) medical benefits in the case of an auto accident. Although it is not a perfect system, when someone is injured in an automobile accident in Michigan, we do not have to worry about who is going to pay the medical bills. The bills can get into the millions if someone is severely injured (catastrophic). The $5,000 to $50,000 that some states mandate in medical expense coverage would only scratch the surface. Not all people have employer provided health insurance so this acts as a way to protect everyone since automobiles are the primary form of transportation for the majority of the people in this state (and the rest of the country).
As one of the original designers and developers of No-Fault back in the early 1970s, the concept of unlimited medical benefits was well received in a number of states, and continues to serve the public well. Don’t let the relatively few who “milk” the system (including lawyers) ruin a good thing for the general public. And no, simply offering better than base benefits doesn’t work – they still sue agents and recover – take it from one of the most frequently retained insurance litigation expert witnesses in the country. Stay with what you have.
What the article fails to mention is the most health insurance contracts in MI have a no fault exclusion and are excess over the auto coverage. This was becoming the standard practice when I left the state 10 years ago. At that time the MCCA charge was $12 and some change a year! Letting the public choose is not the answer. The answer is forcing reduced charges for the services that drive up the insurance costs. Cost of repair, Dr fees, hospital charges etc. They are trying to treat the result and not the cause of the increased costs.
This artical takes a very superficial look at at complex subject. MI has the best insurance in the country, maybe the world. Some points to consider:
If you have a catastrophic injury, say your a quad, you are going to loose your work provided insurance, but your Auto carrier will cover your acct related issues for life.
Detroit has high insurance cost, because they have a crime problem, theft is rampant and traffic laws are not obeyed, causeing more accidents. Also, their courts often make unreasonable rulings.
MI should modify their law to allow the federal government to have to contribute to the cost of a catastrophic victims injuries. In every other state people end up collecting Medicade benefits to cover their injury. MI vehicle acct victems never have to go to the Fed for payment.
Well theres more but you get the point.
I’ll keep my champagne thank you!
Michigan PIP should be a choice, actually we should just go to plain old medical payments on the policy and the driver purchasing the insurance should chose what they want, if any.
The majority of the states in this country ARE NOT PIP states, Michigan is the only state with UNLIMITED PIP coverage. I do agree that the coverage is great, but the price is ridiculous!
And to John O who is scared of E&O Claims, if you offer the coverage and explain it like a good little insurance agent should do, then you wouldn’t have to worry about e&o claims. What are the agents in states where e&o isn’t available or an option doing? Being sued everyday?
Give us a choice — Insurance Agent E&O is available in every state. E&O claims do happen all the time and yes, the E&O insurance will defend the agent when a serious accident occurs and the customer has declined coverage, but the cost of the defense, the time to defend, the loss of claim free credits and the lost time to the agent to continue to practice their profession is a very high cost. The point is – control the cost of the auto claims to control the cost of the insurance. You are right – Michigan has a unique program for unlimited PIP. It was originially set up to mirror workers compensation, but does not have the cost containment controls that WC has so cost of a claim is many, many, many times higher in Michigan than in other states.
Whatever is decided, agents need to know that this will become an e&o issue. After the fact is always when an insured is sure they would have paid whatever amount to purchase what they needed. As always it will be up to agents to document with signatures what the insured bought and that they understood what they bought. The understood part as always – the most challenging.
Remember when our legislators got in the middle of the MCCA funds back in 90’s. They decided to “return premium” back to insured’s because they thought the MCCA was overfunded. Typical governmental intervention!
Aren’t there a few issues here?
FIRST: cost of medical and rehab services. Since MediCare and WC adopt fee schedules, and there appear to be non e for MI PIP, wouldn’t it make a lot of sense to institute same fee schedules and oversight as on WC or MediCare? I am sure that the health providers, being squeezed in other areas, are looking at PIP as the new goose that laid the golden egg
SECOND: there is a strong point to the fact that other states dump off costs to MediCare and MediCaid and SS disability…CA indicates in their studies that 44% of the MediCare claims paid are really as a result of unfunded WC claims…imagine if this ever got all sorted out so we could see the true costs of all this
THIRD: our healthcare system in this country is an abysmal mess with true costs not known since so much of the costs are shifted. Regardless of what you feel about the Healthcare Bill, at least we are opening up the debate. Now, if we can only stop political name calling and get down to the REAL problems of too much cost, overutilization, too much prescribing, not enough preventative medicine, etc., etc., etc. maybe we could carve out a better way for all loines of coverage and the public at large.
Cassandra,
Great points, but I am affraid that you are asking way too much of our government.
Wiser1 you are right. The republican candidate who was elected to be the governor was John Engler. He followed throught with his promise to return the funds to the policy holders. The democratic candidate if elected was going to take the MCCA funds and move them to the general fund. The result was the MCCA fund was depleted. Gotta love those politicians.
The problmem is we demand too little of our governments and don’t hold them to task when they don’t deliver. They have conditioned us to have low or no expectations.
It is especially heart wrenching when we have serious, serious issues and we have only Tweedle Dee Dee and Tweedle De Dum for choices
Only the rich can run pretty much and the days of the “citizen patriot” are clearly over, replaced by swelled heads with their hands out.
I agree with Michigan Agent, our politicians on both sides of the party lines make dumb decisions when it comes to the MCCA fund. The money should not be returned, nor should it be refunded. It should be kept in the fund and used ONLY for its intentional use. If it grows, great! Then the MCCA assessments would move towards zero and the costs for each Michigan policyholder drops. Yay!