Since the early 1970’s Michigan law required all motorists to maintain No Fault auto insurance which pays certain benefits to injury victims regardless of fault. Benefits included loss of income and all medical costs regardless of the extent or size of the medical bills. However, In May of 2019 the Michigan legislature, bending to the insurance industry’s pressure and influence, enacted changes to the No Fault law which drastically changed requirements for insurance coverage, placed a “cap” on certain benefits, allowed persons to “opt out” of coverage which formerly was required, and limited the amount of certain benefits, such as home attendant care by family members for severely injured persons. Effective July of 2021, family members’ compensation for attendant care is limited to 56 hours per week, even in those cases where 24-hour care per day is required.
One of the most distressing changes in the insurance law is establishing a motorist’s personal responsibility for the medical costs of persons injured in a collision. Under the former law, a motorist causing injuries could be held liable for certain kinds of damages such as pain and suffering, but could not be personally liable for most “economic damages”, including medical expenses.
The “opt out” provisions of the new law, not surprisingly, shift the costs of medical care from the auto insurers to other insurance policies and/or to welfare programs such as Medicaid. Despite many consumer groups and attorneys arguing that these insurance “reforms” would benefit the insurance industry the most, the legislature and the governor surrendered.