The mayor of Detroit, Mike Duggan, turns to the courts to lower the highest self-insurance rates in Michigan after being rejected last year Legislative state did not support to overtake the no-fault insurance system. Duggan, which is joined by eight nationwide drivers who are also plaintiffs, filed suit on Thursday in the Detroit US District Court (19659008) The lawsuit against Michigan's Insurance Director challenges the court issued in 1973 Declare no-fault law unconstitutional because it failed to produce "fair and equitable" car insurance rates.
At the time, the court wants the state to have six months to change the law so that interest rates go down. And if the state can not fix a bug during this time, Duggan's lawsuit says the court should declare "null and void" and convert Michigan into a compensation-based insurance scheme similar to Ohio, Indiana and 36 other states
Under a compensation scheme, the Democratic mayor said he believed car insurance rates in Detroit would be halved.
Duggan's Trial Reads As Indictment Against The No-Fault System Galloping Medical Costs, Unbridled Greed And Fraud And Increase In The Last Years Of Car Accident-Related Litigation
Under Michigan's unique no-fault system, all motorists must Cover for potentially unlimited medical services. Benefit payments are limited in the other 11 states without debt, and motorists in criminal states receive minimal health care through car insurance.
The cost of Michigan consumers for medical services will not be to blame the annual fee of $ 192 a vehicle from the Michigan Catastrophic Claims Association to compensate insurance companies for accident victims whose medical bills have exceeded $ 550,000
A spokeswoman for the Michigan Department of Insurance and Financial Services, the defendant in the lawsuit, declined to comment because the department failed
For Duggan, the lawsuit could be viewed as Plan B for lowering motor insurance for Detroiters after the proposed no-fault overhaul bill was rejected by 45 in November -63 vote in the House of Representatives
"I thought it was so obvious that the trial lawyers and the hospitals robbed me that I had no problem to convince the legislature to have a conscience and to change it ", Duggan said at a news conference on Thursday. "I no longer have faith in Lansing to do the right thing."
This bill required numerous controversial changes to strict liability schemes, including restrictions on the payment of healthcare providers, and gave all Michigan motorists a prime choice in terms of health insurance need to buy as part of their car insurance.
These health insurance benefits in no-fault policy, known as "personal injury protection", now make up the bulk of auto insurance premiums in Detroit. The No-Fault system allows lawyers representing accident victims to receive 33 percent of their client's total medical bills as an advance fee.
"My friends at DMC and Henry Ford (hospital systems) are paid three times as well" Lawyers take a third, they still double, "Duggan told reporters Thursday." That's how the hospitals make lawyers out, and people in Michigan are paying the highest installments in America. "
Critics of the last bill of Duggan-backed insurance of the last case said it would have come to the end of the No- Fault Systems and its valuable safety net for catastrophic casualties that would otherwise end up in Medicaid-paid care homes instead of receiving the high-quality home care that is now available.
Under the bill, those who Fault coverage options would need to resort to regular health insurance.
The lawsuit filed Donn First, based on a 1978 Michigan Supreme Court decision in a milestone case called Shavers vs. Kelley, which upheld the concept of no-fault insurance, but felt the law was "unconstitutional in deficit" because there was a lack of mechanisms to ensure that the insurance – a product that all motorists in Michigan need to buy – at "fair and eq reusable rates. "
The Supreme Court in this case gave lawmakers and the governor 18 months to correct the problems of no-fault, and legislators passed reforms in 1979. Three years later, the Supreme Court remained in debt because the law was not challenged further
Duggan's lawsuit has been on the car insurance the rate problem has since gotten worse and therefore unconstitutional.
A report from The Zebra, an insurance comparison website, revealed that Michigan The country's most expensive car insurance rates averaged $ 2,610 a year, and was conducted late last year, based on a 30-year-old single-time driving man who drove a 2013 Honda Accord EX.
The city of Detroit had the The highest rates of any city in the insurance comparison: $ 5,414 per year.
Last year, the Detroit Police released Department 23,087 quotes for motorists for driving without insurance. The department has estimated that 60 percent of Detroit drivers go without insurance, mainly because of the high costs.
The Coalition Protecting Auto No-Fault, a group of medical providers, patient advocates and litigation attorneys CPAN, issued a statement that called Duggan's lawsuit a political ploy that mistakenly made no mistake for insurers instead the high premiums accused.
"CPAN is deeply concerned about the lawsuit, the far-reaching and potentially devastating changes to Michigan's No. 1 Carriage Standard Act, a move that will allow insurance companies to sell worse plans without guaranteed interest rate cuts," said Coalition President John Cornack.
Lawyer George Sinas, a no-fault expert who teaches auto insurance at Michigan State University College The main reason for Duggan's lawsuit is that he does not take into account the role that insurance companies play in setting interest rates (19659008) The mayor's complaint in no way attacks the real problem, as it is a rate-building structure that allows rules to be used by the insurance industry, which are inherently unfair and discriminatory, "said Sinas. "The mayor says nothing about it, and by not saying anything he implicitly blesses insurers' practices."
Sinas also said he proposed to a top Detroit official several years ago that the city filed a lawsuit over prohibitive insurance prices based on the Supreme Court's 1978 Shavers decision, but instead in the questionable ways that insurance companies Motorists calculate premiums.
"This lawsuit could have demanded that the Insurance Bureau hold a hearing and determine if any practices that are being applied by insurance companies today are fair and equitable," said Sinas.
Duggan's lawsuit alleges that non-negligence in Michigan has become unconstitutional, including unlimited medical benefits, overpriced medical benefits, and "no effective protection against these car accident attorneys encouraging over-treatment and large (non-indebted) recoveries for a number of reasons for minor injuries. "
Duggan told reporters his policy preference was that the no-fault insurance should disappear completely.
"Ohio and Indiana did not fall off into the ocean because they have a crime system," Duggan said. "In all the other states, when your car insurance expires, you're covered by your regular health insurance – that could be Blue Cross, It could be a Health Alliance plan, it could be Obamacare, it could be Medicare, it could be Medicaid.
The only place in America that says no matter what other medical care you already have, you have to pay twice if you Buy your car insurance is Michigan, and that's what to stop, "said the mayor.
The other eight claimants in the lawsuit are:
- Carroll Lockett, 69, of Oak Park, who pays $ 329 a month for auto insurance, despite a clean driving record and no accidents in more than 20 years.
- Joseph Vaughn, 53, of Detroit, who is currently uninsured and recently received a $ 4,000 prize offer for six months of coverage, was priceless for him.
- Gladys "Peggy" Noble, 76, of Detroit, a retired social worker with a good driving record, who pays $ 219 a month for the basic care of her 2002 Chevy Impala.
- Stephanie Huby, 49, of Eastpointe, who pays $ 250 a month
- Ian Davis, 27, of Oak Park, who pays about $ 200 a month for his 2012 Honda Civic.
- Haley Roell, 20, of Ann Arbor, a student from the University of Michigan.
- Jacintha Pittman, 39, of New Haven, who pays $ 325 a month for her 2008 Saturn VUE.
- Clayto N Wortmann, 25, of Detroit, who pays $ 280 a month for his 2015 Chevy Cruze.
Contact JC Reindl: 313-222-6631 or firstname.lastname@example.org. Follow him on Twitter @JCReindl.
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