Detroit Caucus Takes Auto No-Fault Discussion to Detroit Residents

Caucus hosts first of two auto no-fault town hall meetings

DETROIT -Detroit Caucus Chairman Representative Thomas F. Stallworth III (D-Detroit), joined by Detroit representatives, heard concerns and took questions from residents on so-called auto no-fault “reform” legislation at a town hall meeting at the Northwest Activity Center in Detroit last night.

“Detroit auto owners pay some of the highest auto insurance rates in Michigan, and Gov. Rick Snyder’s proposed savings of $125 per car, which is only guaranteed for the first year, will do nothing to relieve Detroit residents from the astronomical rates they are currently paying for automobile insurance,” said Stallworth.

The Republican-introduced bill, which was recently voted out of the House Insurance Committee with no Democrats voting for the bill, would eventually dissolve the Michigan Catastrophic Claims Association (MCCA) after that association has paid out its final claim. The bill creates the new Michigan Catastrophic Claims Corp. (MCCC) to handle new claims as soon as the bill is passed into law and takes effect. Although the MCCA will no longer exist, it will still be allowed to assess drivers their annual fee to cover their $2 billion deficit they now claim. Once the MCCA has taken care of its last recipient any money left in the fund does not return to drivers like stated but is transferred in the MCCC.

“The problem here is that no one really knows how much money the MCCA has or how much of a deficit it is running, if they even have a deficit, because its books are not open to the public,” said Rep. Phil Cavanagh (D-Redford). “The bill claims that the new MCCC will be transparent, subject to FOIA, the Open Meetings Act and that everything will be published on its website. That’s nice, but how can we even consider closing the MCCA without seeing the books for ourselves after having paid into the fund for more than 35 years?”

Under the bill, there would be a $1 million cap placed on personal injury protection insurance (PIP) coverage for policies issued or renewed after Dec. 31, 2013. There would also be new limits on rehabilitative care and new co-pay costs on those receiving attendant care. These changes would force catastrophically injured accident victims to try to qualify for Medicaid, which may not cover medical or rehabilitative care that is currently covered under no-fault. Victims would risk not receiving the care that they need to have a good quality of life.

“With the proposed changes to Michigan’s Auto No-Fault system affecting every driver in the state of Michigan it is important to look at the entire picture before we start hacking up the system,” said Rep. Brian Banks (D-Grosse Pointe Woods). “Voters have defeated two no-fault reform proposals at the ballot box already. Michigan residents have spoken clearly and told us to keep no-fault intact. We need to listen to them and find different ways to lower the cost of auto insurance premiums.”

The Detroit Caucus will host a second Auto No-Fault Reform Town Hall Meeting to discuss proposed changes to the system and how that will affect every driver on Monday, May 20, from 6 to 8 p.m., at Salem Memorial Lutheran Church, 21230 Moross Road at Chester in Detroit.