Auto Insurance Coverage and Reducing MI Rates

MDRC Position & Commentary

By RoAnne Chaney, Executive Director

Vermont, according to Forbes magazine, has the lowest auto insurance rates in the nation.

Several years ago, while visiting a friend in Vermont, I met a young woman who had acquired a spinal cord injury in an auto accident seven years earlier. In the seven years since the accident, she did not have insurance coverage for the any accident-related costs because “fault” had not been established by the courts to determine which insurance should pay. She had not received any rehabilitation services in those seven years. This young woman had needed rehabilitation treatment delivered in a timely manner to regain as much physical functioning as possible. Valuable time was lost which could never be recovered. In the years since her accident, she has become greatly impoverished and finally became eligible for Medicaid as her court case continued to languish in the system. It is likely that she will spend the rest of her life entrapped in poverty.

Michigan must not return to a tort system like this in Vermont. The tort system ultimately ends up costing taxpayers more; further clogs already overburdened courts and denies victims the help they need to lead productive lives. The results of that system have a negative impact on everyone. We can’t go back to a system like Vermont’s!

We need a no-fault and auto insurance system which:

1. Is transparent and efficient.
2. Does not simply transfer costs to another system,
3. Protects needed and critical benefits for those who have been in an accident,
4. Sets auto insurance rates on only actuarial sound factors,
5. Reduces costs in a thoughtful and actuarial sound manner, and
6. Holds all aspects of the system accountable, including providers and insurance companies.