Thursday’s Post 11/10/11 –  Michigan is the only state in the U.S.  that  still offers “unlimited” Personal Injury Protection (PIP) benefits for auto accident victims. The unlimited insurance coverage includes lifetime benefits for victims who have suffered extensive injuries and will require lifetime medical care, as is often the case for spinal injuries and paraplegics. This is, however, set to change with the implementation of a new bill that was passed by the House Committee. The bill intends to put a ceiling on the maximum amount of medical coverage that an accident victim can receive from his insurance company. The new bill also requires that the coverage specifies the type of care that the victim will be entitled to. In effect, what this means is that if the coverage has specified a certain type of medical procedure but the patient requires something different, he will have to finance this from his own resources. This also means that if the cost of medical care for the patient exceeds the ceiling stipulated in his insurance coverage, he will personally have to meet the extra expense.

Michigan’s no-fault insurance has been hailed for offering unlimited medical benefits for accident victims. But this comes at a very high cost to auto insurance providers limiting their ability to compete. Quite naturally, it is more expensive to offer unlimited medical coverage as opposed to offering coverage with limited benefits. The expensive cost of insurance has resulted in a number of motorists driving without insurance. Proponents of the new bill argue that placing an upper limit on the amount of medical coverage that insurance coverage can offer will lower the cost of insurance and premiums payable by the motorist. However, not everyone agrees with this view. Some insurance analysts contend that, although the cost of offering medical coverage may come down, there is no guarantee that this will automatically translate into reduced premiums for the consumers since the reduced cost might only go to improve the insurance companies’ bottom lines.

Kevin Clinton, a commissioner with the Michigan ‘Office of Financial and Insurance Regulation’, points out that these fears are unfounded. He says that the insurance regulatory body OFIR will step in and force the insurance companies to lower their rates. He adds that, although the powers of OFIR are not unlimited, changes to the new laws are being made to make sure that the catastrophic claims fund remains viable. He further adds that the competitive insurance arena means that any company that does not lower its auto insurance rates after implementation of the new bill risks losing business to other companies that are willing to do this. Mr. Clinton advises people to consider other options such as Social Security, Medicaid, Medicare and health insurance, which offer affordable health care insurance for accident victims.

On a personal note; InsureDirect.com agents and customer service reps has seen auto insurance PIP reform in two key states; Pennsylvania and New Jersey.  Not only does this type of reform provide a breather for a states existing car insurance carriers,  it provides opportunities for new underwriters to enter the state. In New Jersey; two major carriers have entered the marketplace and are making a big splash.  Mercury  and Personal Service Insurance company are providing low-cost auto insurance coverage for all types of driving records.  Regardless if you have a perfect record or you have  and unfortunate accident, tickets even a DUI – these carriers have the lowest rates available in the Garden State.