Legislator's letter on insurance 'misleading'
To the Editor:
I found Michigan state Rep. Scott Dianda’s (D-Calumet) letter to the editor in the Aug. 30 Daily Globe to be very misleading.
The reasons are:
— No-fault isn’t the issue; unlimited medical benefits are the problem.
— Michigan is one of 13 states with a no-fault law.
— We’re the only one with an unlimited PIP Benefit.
— 2012 the average medical claim in Michigan was over $45,000. The next highest state, New Jersey, is a no-fault state also. Their average was $17,000.
— Every other state a person has the choice on how much in medical coverage they want to have. Michiganders have no choice.
— In all other states, the car insurance company can negotiate their rates for service with medical providers. In Michigan, we cannot. We pay unadjusted rates.
— In all other states, Medicare, Medicaid and Tri-Care will pay for auto accidents either in a secondary or primary fashion. In Michigan, they deny all auto claims because they know what they don’t pay, we have to.
— Dianda’s numbers on the catastrophic premium are off slightly. It was $185 last year per car. July of this year it ticked up to just over $200. You may think that’s not a lot; however, for many in our state it is. A person who is paying $400 every six months for their car insurance is really paying their company $300, so the state is getting 25 percent. You won’t find this in any other state.
— It’s an uncontrollable rate. In 1997, the fee was under $5 a year.
— Michigan has no fraud department within its insurance regulations, yet we have the most extensive benefits. Independent studies have found that close to 40 percent of PIP claims involve some element of fraud.
— Insurance companies aren’t profitable in Michigan. That’s why we see smaller regional companies pulling out of Michigan or not even coming to Michigan.
— We can keep our no-fault but PIP needs addressed.
This issue should not be something that is used to play politics with. If our system was so great wouldn’t other states have adopted it? Michigan has the highest average rates in the nation, so the current system is not working. Reforming an outdated, broken system would bring financial relief to every Michigander.