No-Fault Auto Insurance Policies: A Good Thing or Bad?
No-fault laws are those that don’t require someone to be blamed for an accident, or a situation such as a divorce. They are typically determined in the states and can vary from one to the next. Currently, there are almost a dozen states where auto insurance companies can still offer coverage for no-fault policies to pay for any medical expenses incurred due to a car crash.
When there is no option of no-fault policies, it can put hardships on those who are required to carry insurance to drive but can’t afford the high premiums attached to various policies. Due to Michigan being one of the states with the highest cost in the nation for auto insurance, the Michigan House members are considering whether to give motorists a break.
In Michigan, if you choose to have a no-fault policy, the insurance laws require that drivers purchase additional coverage that will provide medical benefits for a lifetime. Michigan is one of the most stringent states when it comes to making auto insurers have full coverage, which some believe, are excessive.
According to a Baltimore dui attorney, the average motorist will pay approximately $2700 a year or more in insurance premiums to cover the laws as dictated by the state. That is more than double of most of the other states in the Union. That is why many motorists believe that changing the law would not only be simple, it would be fair.
Consumers are insisting that, due to the increase in coverage demands and price, paying the cost to drive is putting a financial hardship on families. The problem is that although seemingly easy, if Michigan pulls back on the coverage requirements, there is a debate about how much hospitals and doctors can get reimbursed for car crash injuries. At question is also whether caretakers, who have to take an absence from work, should have their losses reimbursed.
Being one of the few states that still allow a motorist have a no-fault policy, it assumes that each driver involved in an accident must assume responsibility for the cover of treating any injury costs. Since there need not be any fault ascribed to an accident, each party is equally responsible, and, therefore, it is driving up the cost of motorists to maintain insurance. When there is property or vehicular damage, those things are typically covered under either the comprehensive or collision provisions of the policy and not at the debate.
No-fault policies were initiated because the thought was that insurance companies could pay for the accidents at a quicker rate for crash victims and that it would drive down the price of premiums. Since there were no more caps for limits to consumers’ damages or ability for consumers to sue, the original intention was to better cover motorists and make the process easier.
Around since the mid-70s, 16 states thought the idea was a great one and overhauled their auto insurance laws. The problem is that after almost fifty years, no-fault policies have not been the savior that they were supposed to be. In fact, it would appear that they are driving up insurance premium costs and drivers are now suing their insurers for coverage that the carriers refuse to pay for. That has made the whole system confusing, frustrating, costly and fraught with fraud.
Most states that had initially used the no-fault insurance laws have since dropped them, and that is the position that Michigan is finding itself in. The thing that appears to be driving the costs up the most is the additional unlimited lifetime medical care and benefits rider. Specific to Michigan, no other no-fault state has the additional provision. That is what is driving residents to question why they are required to pay the additional cost when no other no-fault state motorists do.
The Michigan House is set to discuss a way to not only reduce the cost incurred by motorists but to cut down on the fraud which appears to be rampant in the car insurance industry. When no one has to be at blame, scammers find it easier to sit back and collect on policies without the much necessary proof that other states require.
There is no doubt that Michigan motorists are drowning under the weight of high insurance premiums. Whether Michigan will just revise their laws or undo the no-fault option remains to be seen.