When he sets out to do something, Detroit Mayor Mike Duggan doesn’t often lose. But he did last year, when he attempted to get the legislature to overhaul Michigan’s unique no-fault auto insurance system. His bill lost overwhelmingly in the House and never got to the Senate.
Now, Duggan is suing the state in federal court. He blames our no-fault system for the fact that Michigan has the highest-in-the- nation auto insurance rates, and wants our present system declared unconstitutional, because he says it fails to produce fair car insurance rates.
Car insurance rates are the highest of all in Detroit, as many people know, and that has been a major impediment to getting people to move back to the city. Many who do live in Detroit have driver’s licenses that claim they officially live elsewhere, to keep their insurance rates low.
That means, of course, they can’t vote in Detroit, and are essentially living a lie. Well, I think Duggan has been a good mayor, and I entirely sympathize with his frustration here.
But I also think he is dead wrong. Michigan drivers all pay $192 per vehicle per year that goes towards the Michigan Catastrophic Claims Fund. That fund now has something like $20 billion – billion with a b – in it, and it guarantees that anyone racked up in an accident will get all the medical care they need, for life if they need it, no matter who is at fault.
The mayor wants to do whatever it would take to bring rates down, including, if, necessary converting Michigan’s system into one in which your coverage for serious injuries would be capped, and in many cases you would have to sue your insurance company, or the other driver and his or her insurance company, or both.
Such lawsuits can take years – and who would pay for the catastrophically injured plaintiff during that time? Oakland County Executive L. Brooks Patterson has been energetically pro-business his entire life. On most issues and in most cases, he is more conservative than Mike Duggan. But Patterson will never support the idea of ending our automatic catastrophic claims coverage, and there’s a big reason why: He was very badly injured in a 2012 auto accident.
He was in a coma for weeks. His driver survived, but is a quadriplegic who will need constant care for life, and who is relying on the catastrophic claims fund to do so.
Something like that could happen to you, or me, the next time we go to the grocery store. Even if it doesn’t, if we eliminate the coverage we have now, innocent people are going to get inadequate care, see their families bankrupted by the system, suffer, and die.
Now, nobody is denying that car insurance rates in Detroit are too high. But people like lawyer George Sinas, a Lansing attorney who handles many of these claims, and Julie Novak, the CEO of the Michigan State Medical Society, say we are blaming the wrong culprit.
They think, as Novak wrote in a column published in the Detroit News, “we need to hold the insurance companies accountable for their unfair practice of using non-driving factors like gender, credit score and ZIP code to set rates.” Sinas thought the mayor should have asked the insurance bureau to determine whether the rate-setting practices were fair and equitable.
But that didn’t happen. I think the state should commission some group like the Citizens’ Research Council of Michigan should do an in-depth study of this situation before anyone acts.
We’ve got the best catastrophic claims coverage in the world. We should think twice before trading it away.
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