Opinion | The truth about no-fault and Mayor Duggan’s misguided lawsuit

Tammy Hannah is the president and CEO of Origami Brain Injury Rehabilitation Center in Mason, Michigan

No one wants to think about it. But the truth is, a catastrophic auto accident can happen to anyone.

According to AAA, the average American spends more than 290 hours on the road every year. Meanwhile, the Michigan State Police reported 312,172 auto accidents in 2016, with 79,724 injuries.

Here in Michigan, we have a very special way of protecting our families, drivers and taxpayers when accidents occur. It’s called the no-fault insurance system, and it’s a model for every other state in the country. There’s been a lot of misinformation about no-fault circulating lately, particularly coming from the insurance industry and Detroit Mayor Mike Duggan. I’d like to take this opportunity clear things up.

Counterpoint: Opinion | Michigan no-fault insurance helps doctors, lawyers, not drivers

Michigan’s no-fault insurance system means that anyone who gets into an accident will receive the care they need for as long as necessary, and for some, this means for the rest of their lives. Opponents claim that this means accident survivors get “unlimited” benefits, but that is false. The law simply requires that insurers pay for what is deemed to be “reasonably necessary.”

Michigan’s no-fault system is the best in the country because it saves lives and taxpayer dollars. Unlike in other states, Michigan’s seriously injured accident survivors receive the care they need when they need it—without having to litigate, turn to government programs, or face bankruptcy as a result of the cost of their care.

Most people don’t understand the invaluable nature of no-fault in Michigan until they are injured catastrophically in a car accident, or are faced with caring for a loved one who has been injured. Because of no-fault, Michigan patients often make exceptional progress compared to those from other states who are not given the same level of care. Without the medical coverage provided under no-fault, many of our patients would be facing major sacrifices in their independence, career goals, relationships, and lifestyle.  

My team and I do not like to imagine how the success of our treatments – 75 percent of patients return to their home community and 70 percent to their previous vocation – would change were they not supported under no-fault legislation.

The recent lawsuit brought by Mayor Duggan, which attempts to declare no-fault unconstitutional, fails to recognize who is truly to blame for high premiums—the insurance companies and their unfair practices of setting rates based on gender, occupation, ZIP code and other factors that have nothing to do with your driving record. Instead, it vilifies providers as garnering wealth from this legislation. These claims could not be more unsubstantiated. The constellation of providers with whom I work every day are highly ethical and committed to selfless care for patients who need it in Michigan.

There is a better way to lower rates without getting rid of Michigan’s model auto insurance system. The bipartisan Fair and Affordable package of bills—which is sitting in the Michigan Legislature where leadership has refused to put it to a vote—will address the real issues behind Michigan’s high insurance rates by banning the use of non-driving rating factors when setting insurance premiums and by holding insurance companies accountable. It will also make auto insurance rates more transparent, crack down on fraud committed by anyone in the system, and lower health care prices by enacting a fee schedule.  

Care providers give the same level of support regardless of gender, marital status, education level or any other characteristic. It’s time insurance companies enlisted the same equitable practice. I urge legislators in our state to consider this package of bills and the rights that all Michigan citizens should have: The right to care, to treatment, to improvement, and to not be bankrupted while pursuing the highest quality of life possible.

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Thu, 09/27/2018 - 7:00am

How refreshing!
Unfortunately in the witch trial atmosphere of today many will likely forgo the time it takes to read sensible opinion for the ease of slogan based politics.

Thu, 09/27/2018 - 7:39am

Once again we have have someone trying to export the consequence and costs of crappy driving habits from one locale to the rest of the state! Like it or not credit scores, age, school completion and grades, criminal history and yes zip codes along with other things do correlate with insurance claims and this editorial is a denial of facts and a move to pass associated costs onto more responsible residents.

Thu, 09/27/2018 - 7:48am

If Michigan No Fault was a Model for other states as she claims, why are we the only State to have it?! She also claims No Fault is the reason 75 percent return to their home community, I doubt that is because of No Fault as well as her claim of people not turning to government programs. Come on, No Fault Reform is needed and Coverage Choice to the Consumer. Hospitals need to charge the same for an xray for auto accident victims as they charge other patients, and other Insurance Private and Public Carriers need to share the cost of coverage. She offers a Special Interest view

Fri, 09/28/2018 - 6:19am

Mark, do you truly believe that insurance companies want to dismantle Michigan’s Auto No-fault system because they are looking out for your best interests?

Thu, 09/27/2018 - 8:50am

People remember that Mayor Duggan did not say a word when Ruth Johnson destroyed 75000 ballotes in the NOV 2016 election!!!! who owns him!!!

Thu, 09/27/2018 - 9:39am

Revealing editorial, and spot-on regarding the real reasons behind excessive rates, especially in Detroit. The pool of insured drivers is too small in Michigan and it doesn’t have as many low-risk (good) drivers in it as it could, largely because the current rating factor system — including the extreme weight of credit scores and ZIP codes and other unfair factors like job title, education level, gender and marital status — makes insurance particularly unaffordable to good drivers with low- and middle-incomes. By reconfiguring the rating factor system to incentivize good driving rather than relying on socioeconomic status, Michigan will see both more insured drivers generally (and more money in the pool means lower cost to all insureds) and more good drivers specifically (more low-risk drivers in the pool has an even stronger downward pressure on rates). So, addressing rating factors does in fact lower overall rates by increasing participation in the insurance pool.

Ben W. Washburn
Thu, 09/27/2018 - 10:30am

Ms. Hannah makes some thoughtful good points, but omits some other useful context. Matt may be right about relevant pricing factors, but he could also be dead wrong. There is no way to know, because the insurance industry does not disclose the factual basis for their pricing. But they do lobby intensively to discourage legislators from seriously asking that question.
The main reason for having a "no fault" rather than a fault-based system, is to avoid the delay in receiving payment for a legitimate claim. Under the old fault system, many victims had to first pay for their own costs, and then litigate to obtain reimbursement. The courts were jammed-up with personal injury cases. In Wayne County, the backlog to get to trial was 3 years. Victims were pressed to settle for much less than their situation deserved, because of the economic pressures of treatment bills, and no income from being out of work for long periods. 97% of these cases were eventually settled, but usually only after a wait of 2 and a half years. And up to a third of the final settlement went for legal costs. Does anyone really want to go back to running that kind of risk every time they get behind the wheel?

Thu, 09/27/2018 - 11:10am

We are a family that has survived and thrived after a devastating auto accident caused by black ice conditions. We intimately understand that the Michigan insurance system saved our lives after the ER doctors kept us alive. Unless you have survived a life-altering car wreck, you can't begin to understand the months and years of pain you will face. Nothing will ever be the same for you or your family.

Without the Michigan No-Fault system, our struggles and suffering would have been increased exponentially. We know people who have had very different experiences in other states. Their experiences have been so much worse and their lives spiraled downward on every level, and have never recovered. ANY reforms that take place must keep protections in place as they are today.

Be grateful and humble that you never have to learn these lessons like we did. I never complained about the system (or the cost) before the accident and I sing its praises as a living example of what it is to be a thriving survivor and a productive part of the community.

Kevin Grand
Thu, 09/27/2018 - 1:03pm

No oversight on how MCCA funds are spent (or determined).

By extension, as Mark and others have pointed out above, no questioning of the amounts the MCCA pays hospitals and doctors for treatment.

No questioning regarding the anemic rate of return of MCCA investments.

Why did the MCCA impose a double digit increase earlier this year again? All we got was the nebulous "higher than expected claims costs".

This reminds me of the the "promises" that were made regarding what a wonderful job Obamacare would do towards reducing health care costs.

You cannot fix programs that are inherently unstable and not viable over the long term without pouring in ever increasing truckloads of cash.

BOTH need to be abolished.

Wed, 10/03/2018 - 3:49pm

I totally disagree with her! There is discrimination with the area you live in and credit history! What does credit have to do with it if your making your insurance payments on time! Sounds like another politician!

Michigan Resident
Fri, 10/12/2018 - 12:34pm

It's a RIP off! People who want high end plans with Insurance for LIFE if they're injured should be asked to pay the high premium up front. Every stinkin' resident in Michigan shouldn't be asked to cover the costs of others who have unfortunate incidents!

Also Michigan R...
Sun, 04/07/2019 - 10:33am


Wed, 10/24/2018 - 8:30pm

Totally disagree with the author. The insurance companies are already on the hook for accident compensation. The system is ran by the insurance companies. It is ran so that the taxpayer picks up the tab for this system......not the insurance companies. Car insurance is unaffordable for a lot of Michiganders. Our Indiana and Ohio neighbors pay 60-70% less that we do for car insurance. I don't see anybody not getting medical care for car accidents. I lived in Indiana for 12 years. Nothing wrong with their tort system. Michigan is being careless and lazy with regard to No Fault insurance

Tue, 11/06/2018 - 10:37pm

It’s utterly ridiculous to pay MCCA fees on every vehicle you own. You can only drive 1. If you want this coverage then buy it; if not then you shouldn’t be forced. Over 60% of my insurance bill is PIP & MCCA! A complete rip off! My car insurance is higher than my property taxes! We need an end to this insanity. No fault is an utter failure.

Wed, 11/07/2018 - 8:28pm

This is true. My son works at a rehab center. He has seen first hand, seriously injured people healed over a year, or two. Without no fault they would have never had a chance. They would never get the care they need. He has enlightened me to the truth about no fault.