the truth about your auto no fault

The Truth About Your Auto No-Fault

What You Don’t Know Will Hurt You

What’s going down• Your representative in the Michigan Congress is about to vote

on a bill (HB4936) that affects everyone in the State of Michigan. It affects you and your family. This Bill will essentially abolish the Michigan auto no-fault system and put you, your family and friends at serious risk.

• The House Insurance Committee has constructed a bill that has stripped you of all of your voting rights on this issue.

• In the past, Michigan residents have voted against this as a proposal on the ballot. This time you are not going to have the chance to vote, because your representative said that you voted for them to make these decisions for you.

• I don’t know about you, but I don’t remember my Representative telling me that they were going to dismantle our auto no-fault system, during their election campaign. Remember, back when your opinion mattered.

Your Biggest Fear

• I think most of us would agree that the biggest risk that we take in our everyday lives, is when we are driving in our automobiles.

• Think about it, when throughout your day are you and your family members really taking the most risk of suffering a serious, sometimes catastrophic injury?

• The residents of Michigan are the smartest people in the United States when it comes to dealing with this.

• Now our biggest fear, is that we’re going to lose our protection, the Michigan Auto No-fault System.

Why is Michigan the only one?

• I wish I could tell you how many times I have heard, “Well, they’re not doing it like that in the other 49 states, so why should it be like that in Michigan.”

• I’m sorry but only one can be the leader and the rest will follow. Our auto no-fault system is known as the best in the country, by far.

Michigan MCCA History

• The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1973.

• Michigan residents took it upon themselves to create a self-sustaining system that would protect and take care of them every time they got into an automobile, taking the biggest risks of their daily lives.

• Every year, when you pay your auto insurance, you pay for MCCA benefits known as PIP benefits.

PIP Benefits

• What are PIP benefits and what do they provide for me?

• Personal Injury Protection benefits provide you with benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle, and PIP benefits protect you from being sued as the result of an auto accident.

Main Benefits of PIP

• 1. Personal injury protection benefits will pay for all reasonably necessary costs for your care, recovery, and rehabilitation expenses resulting from injuries sustained by an automobile accident .

• 2. The no-fault law protects Michigan drivers from being sued as the result of an auto accident.

• Without protection, either one of these two situations could potentially bankrupt your family for generations.

Michigan Catastrophic Claims Association

• Currently residents pay $145 annually to the MCCA for PIP benefits on each auto insurance policy that they purchase for a vehicle registered in the State of Michigan.

• This means that Michigan residents have found a way to cover the biggest risk they take in their daily lives for about $20 a month. Sounds like a good deal to me, I know that I pay almost $10/month for insurance on my cell phone.

It’s Your Money

• The Michigan Catastrophic Claims Association currently has approximately $13.8 Billion of your money in assets, consisting mainly of stocks and bonds.

• Where did the $13.8 Billion come from?You, your Mother, Father, Grandmother, Grandfather, Aunts, Uncle’s and your kids. Anyone that has paid car insurance in Michigan in the last 38 years.

Let’s do the math 2010

• 8.1 million registered vehicles according to the Michigan DMV in 2010.

• Take away the 15% uninsured vehicles, and that leaves approximately 7million vehicle policies paid PIP benefits of $145/vehicle.

• 7,000,000 X $145 = $1,015,000,000• MCCA took in approximately $1.015 Billion in

MI resident policy revenue alone in 2010.

Still doing the math

• Take the 1.015 Billion collected on Michigan residents auto Pip benefits in 2010.

• Then the MCCA paid out approximately $800 million in claims for catastrophically injured auto accident patients, in 2010.

• This means that the MCCA took in $200 million more than it paid out in claims, in just insurance policy revenue alone in 2010.

• Remember, we still have 13.8 Billion in assets that should collect interest income annually.

Michigan’s Got It Right

• Essentially, what this means is that the Michigan residents have found a way to cover the biggest risk that they take in their daily lives for approximately $20 a month.

• In the process, we have created a safety fund that has $13.8 billion, has increased its assets every year rising by over $200 million in 2010, and has only had to pay out $8 billion in total claims since 1973.

• I think the residents of Michigan are a little smarter than people think.

Where is the savings?

• According to current statistics Michigan’s average auto insurance policy has increased to nearly $2,541 a year.

• Only $145 of your policy premium pays for your PIP benefits.

• How much could you potentially gain by giving up your Pip benefits, when they only account for less than 6% of your premium???

• Why is the rest of your policy costing you so much???

Same old story

• The insurance industry wants you to believe that our system is unsustainable according to their statistics. It just doesn’t have enough money.

• This isn’t the first time that we have heard this story from the insurance industry. In 1992, their experts had statistics that said our system was unsustainable and they needed to cap your benefits.

• This appeared on the 1992 ballot as Proposal D and was defeated by the Michigan voters.

Here we go again

• Then again in 1993, those same experts said the system was unsustainable and couldn’t continue to survive at the pace of the growth of the claims.

• Proposal C on the November 1994 ballot wanted to cap your benefits and impose a fee schedule. Voters again rejected the proposal.

Oops, our mistake

• Then in 1998, Insurers realized that their projections and figures were wrong, and there was actually too much money in the MCCA fund.

• At this time there was approximately $2.5 billion in assets and approximately $200 million in claims.

• A 12 to 1, equity to expense ratio.• On June 30, 1998, after the passage of the refund

legislation, the MCCA proceeded with a $1.2 billion refund. Refunding half of the total assets.

Here We Are Today

• Now, let’s fast forward to today. Here we are again listening to the same type of experts, from the insurance industry, telling us that our fund is in trouble. It’s simply unsustainable and they need to cap your benefits and impose fee schedules.

• Again, the numbers just are not adding up. The growth of the amount of the claims has slowed in growth this decade from the previous decade, and we have a better equity to expense ratio, than when the refund was issued in 1998.

MCCA Stability• From 1984 to 1994 the amount of the claims grew by

approximately a 1000% increase.• From 2000 to 2010 the amount of the claims have grown

by less than a 300% increase.• In 1998 when everyone agreed the fund had too much

money, $2.5 billion assets with $200 million claims, an equity to expense ratio 12 to 1. A refund was issued.

• Now in 2010, the fund has $13.8 billion assets with $800 million claims, an equity to expense ratio of 17 to 1. Now, they are saying that the fund is insolvent??? It just doesn’t add up.

What’s not in their projections?

• A couple reasons why their numbers may not be adding up is because their projections probably aren’t taking into account the patients that rehabilitate or the mortality rate of other patients.

• Our system has been designed to give you the best possible chance to rehabilitate and get integrated back into society, should you or one of your family members get seriously injured in a car accident.

What’s not in their projections?• They say that, 1% of the people injured, spend

approximately 30% of the money. But these people have the most serious injuries, and have many costly bills. Many times they are hospitalized for most of the first 3 years of injury. And then many are lucky to survive only a couple of years after leaving the hospital and rehabilitation.

• As some of these patients become stabilized, through establishing a plan of care and moving back into their homes, many times the amount of their medical bills will begin going down over time.

The automobile industry contribution

• One other thing that we don’t see in their predictions, is that the auto industry has made great strides in making travel safer for us since 1973. Adding multiple airbags in vehicles is just one example.

• In fact, according to the Michigan State Police, in the last decade from 2000 to 2010 auto accidents in the State of Michigan have fallen by 31.5%.

What’s their solution• Put a cap on the amount of medical benefits you can receive

from the MCCA.• Eventually shifting all of the existing and new patients

medical expenses from the MCCA to the Medicaid system.• Impose a fee schedule similar to Workman Compensation,

on medical providers, cutting their reimbursement from the MCCA by as much as 30% to 40%.

• Eliminate the Michigan auto no-fault system as you know it. Exposing you to potential lawsuits from other drivers and capping your benefits.

Putting a cap on your benefits• Currently Michigan residents that are catastrophically injured in

automobile accidents will receive lifetime benefits for their care, recovery and rehabilitation expenses.

• MCCA PIP benefits will cover you and your family while traveling in your automobile. If one of your children were to be catastrophically injured in a car accident, right now you have the comfort of knowing that their medical expenses would be covered for the rest of their life, or for as long as they require care for their accident related injuries.

• Putting a cap on your benefits means that once your medical expenses reach a certain dollar amount, you will then be forced onto the Medicaid or welfare system.

Their Michigan Medicaid solution• According to the governors Michigan Medicaid Budget for FY 2011,

the Michigan Medicaid system has a projected shortfall of $1.5 billion.

• Does it sound fiscally smart to take patients out of a system that has $13.8 billion in the bank and at least $200 million positive revenue this year, and place them into a system that has a $1.5 billion shortfall??

• Also, the current Medicaid system isn’t designed to handle the auto no-fault patients. A lot of the services that auto no-fault patients receive, are not currently covered by Medicaid. How much is it going to cost Medicaid to make these changes, and manage the new patients cases??

• Today, the Medicaid system cannot afford this. And now is not the time to add costs to Michigan Medicaid, regardless of what people think future projections might be.

Their fee schedule solution• Probably one of the worst decisions that the state of Michigan

could make right now would be to cut revenue to the healthcare industry. Costing many Michigan residents good paying jobs.

• Michigan is currently ranked 49th with an unemployment rate of 11.2%.

• Growing by a healthy 25%, the health-care industry is one of the only major industry sectors to post job gains in the last decade.

• Using the Workman Compensation fee schedule isn’t going to work because catastrophically injured patients require more specialized care than most workman compensation patients, due to the severity of their injuries.

• With all of the employment problems in Michigan, now is not the time to make an unnecessary revenue cut to the healthcare industry from the MCCA.

The choice is clear• As a resident of the State of the Michigan, I don’t think

changing our no-fault system is a good idea. • What are the potential gains?

There isn’t one guaranteed in the Bill.• What do we stand to lose?

A lifetime of benefits accumulated by our current and past family members and friends, to be there should one of their loved ones get injured in a car accident.Immunity in exchange for exposure to lawsuits as a result of a car accident. Forcing you to now buy additional liability insurance with each auto policy.

Don’t just sit there

• If we allow this legislation to pass, then this is just another example of the Michigan residents allowing our state government to stand on the side of big corporations and big money, and against the hard working family people.

• It is unconstitutional to construct a Bill that does not to allow the Michigan citizens the opportunity to move forward with a referendum, to vote on legislation that affects every single Michigan resident.

Take Action Today!!

• If you want the House of Representatives to leave our auto no-fault system alone, then you need to act now. This is not the time to wait and see what everybody else does.

• Michigan needs to continue to set the example for how to deal with the risks associated with automobile travel.

• Begin contacting all of the representatives in the Michigan House and tell them to leave our auto no-fault system alone and vote No on House Bill 4936.

MI House Of Representatives Contact List

Look for your representative and contact themBledsoe, Timothy (D) Grosse Pointe, MI 517-373-0154 TimBledsoe@house.mi.govHowze, Lisa (D) Detroit 517-373-0106 LisaHowze@house.mi.govTalabi, Alberta (D) Detroit 517-373-1776 AlbertaTalabi@house.mi.govStapleton, Maureen (D) Detroit 517-373-1008 MaureenStapleton@house.mi.govOlumba, John (D) Detroit 517-373-0144 JohnOlumba@house.mi.govDurhal Jr., Frederick (D) Detroit 517-373-0844 FredDurhal@house.mi.govWomack, James (D) Detroit 517-373-0589 JimmyWomack@house.mi.govStallworth III, Thomas (D) Detroit 517-373-2276 ThomasStallworth@house.mi.govJackson, Shanelle (D) Detroit 517-373-1705 shanellejackson@house.mi.govSantana, Harvey (D) Detroit 517-373-6990 HarveySantana@house.mi.govNathan, David (D) Detroit 517-373-3815 DavidNathan@house.mi.govTlaib, Rashida (D) Detroit 517-373-0823 RashidaTlaib@house.mi.govKandrevas, Andrew (D) Southgate 517-373-0845 AndrewKandrevas@house.mi.gov

MI House of RepresentativesContact List

Clemente, Paul (D) Lincoln Park 517-373-0140 PaulClemente@house.mi.govDarany, George (D) Dearborn 517-373-0847 GeorgeTDarany@house.mi.govConstan, Bob (D) Garden City 517-373-0849 bobconstan@house.mi.govCavanagh, Phil (D) Redford 517-373-0857 PhilCavanagh@house.mi.govLeBlanc, Richard (D) Westland 517-373-2576 richardleblanc@house.mi.govWalsh, John (R) Livonia 517-373-3920 JohnWalsh@house.mi.govHeise, Kurt (R) Plymouth 517-373-3816 KurtHeise@house.mi.govSlavens, Dian (D) Canton 517-373-2575 DianSlavens@house.mi.govGeiss, Douglas (D) Taylor 517-373-0852 DouglasGeiss@house.mi.govSomerville, Pat (R) New Boston 517-373-0855 PatSomerville@house.mi.govForlini, Anthony (R) Harrison Township 517-373-0113 AnthonyForlini@house.mi.govSwitalski, Jon (D) Warren 517-373-1772 JonSwitalski@house.mi.govTownsend, Jim (D) Royal Oak 517-373-3818 JimTownsend@house.mi.govLipton, Ellen (D) Huntington Woods 517-373-0478 EllenLipton@house.mi.govLiss, Lesia (D) Warren 517-373-2275 LesiaLiss@house.mi.gov

MI House of RepresentativesContact List

Farrington, Jeff (R) Utica 517-373-7768 JeffFarrington@house.mi.govLane, Marilyn (D) Fraser 517-373-0159 MarilynLane@house.mi.govLaFontaine, Andrea (R) Richmond 517-373-8931 AndreaLaFontaine@house.mi.govGoike, Ken (R) Ray 517-373-0820 KenGoike@house.mi.govStanley, Woodrow (D) Flint 517-373-8808 WoodrowStanley@house.mi.govHobbs, Rudy (D) Southfield 517-373-1788 RudyHobbs@house.mi.govLund, Peter (R) Shelby Township 517-373-0843 PeteLund@house.mi.govBarnett, Vicki (D) Farmington Hills 517-373-1793 VickiBarnett@house.mi.govCrawford, Hugh (R) Novi 517-373-0827 HughCrawford@house.mi.govBrown, Lisa (D) West Bloomfield 517-373-1799 LisaBrown@house.mi.govMoss, Charles (R) Birmingham 517-373-8670 ChuckMoss@house.mi.govKnollenberg, Martin (R) Troy 517-373-1783 MartyKnollenberg@house.mi.govHaugh, Harold (D) Roseville 517-373-0854 HaroldHaugh@house.mi.govHaines, Gail (R) Waterford 517-373-0615 GailHaines@house.mi.govKowall, Eileen (R) White Lake 517-373-2616 EileenKowall@house.mi.gov

MI House of RepresentativesContact List

McMillin, Tom (R) Rochester Hills 517-373-1773 TomMcMillin@house.mi.govJacobsen, Bradford (R) Oxford 517-373-1798 BradJacobsen@house.mi.govDenby, Cynthia (R) Handy Township 517-373-8835 CindyDenby@house.mi.govHammel, Richard (D) Mt. Morris Township 517-373-7557 richardhammel@house.mi.govAnanich, Jim (D) Flint 517-373-7515 JimAnanich@house.mi.govSmiley, Charles (D) Burton 517-373-3906 CharlesSmiley@house.mi.govScott, Paul (R) Grand Blanc 517-373-1780 PaulScott@house.mi.govOuimet, Mark (R) Scio Township 517-373-0828 MarkOuimet@house.mi.govIrwin, Jeff (D) Ann Arbor 517-373-2577 JeffIrwin@house.mi.govRutledge, David (D) Ypsilanti 517-373-1771 DavidRutledge@house.mi.govOlson, Rick (R) Saline 517-373-1792 RickOlson@house.mi.govZorn, Dale (R) Ida 517-373-2617 DaleWZorn@house.mi.govJenkins, Nancy (R) Clayton 517-373-1706 NancyJenkins@house.mi.govKurtz, Kenneth (R) Coldwater 517-373-1794 KennethKurtz@house.mi.govLori, Matthew (R) Constantine 517-373-0832 MattLori@house.mi.gov

MI House of RepresentativesContact List

McCann, Sean (D) Kalamazoo 517-373-1785 SeanMcCann@house.mi.govO'Brien, Margaret (R) Portage 517-373-1774 MargaretOBrien@house.mi.govSegal, Kate (D) Battle Creek 517-373-0555 KateSegal@house.mi.govBolger, Jase (R) Marshall 517-373-1787 JaseBolger@house.mi.govPoleski, Earl (R) Jackson 517-373-1795 EarlPoleski@house.mi.govShirkey, Michael (R) Clarklake 517-373-1775 MikeShirkey@house.mi.govRogers, William (R) Brighton 517-373-1784 BillRogers@house.mi.govByrum, Barb (D) Onondaga 517-373-0587 barbbyrum@house.mi.govBauer, Joan (D) Lansing 517-373-0826 joanbauer@house.mi.govMeadows, Mark (D) East Lansing 517-373-1786 markmeadows@house.mi.govOutman, Rick (R) Six Lakes 517-373-0834 RickOutman@house.mi.govShaughnessy, Deb (R) Charlotte 517-373-0853 DebShaughnessy@house.mi.govYonker, Ken (R) Caledonia 517-373-0840 KenYonker@house.mi.govMacGregor, Peter (R) Rockford 517-373-0218 PeterMacGregor@house.mi.govAgema, David (R) Granville 517-373-8900 daveagema@house.mi.gov

MI House of RepresentativesContact List

Dillon, Brandon (D) Grand Rapids 517-373-2668 BrandonDillon@house.mi.govSchmidt, Roy (D) Grand Rapids 517-373-0822 RoySchmidt@house.mi.govHooker, Thomas (R) Byron Center 517-373-2277 ThomasHooker@house.mi.govTyler, Sharon (R) Niles 517-373-1796 SharonTyler@house.mi.govPscholka, Al (R) Stevensville 517-373-1403 AlPscholka@house.mi.govNesbitt, Aric (R) Lawton 517-373-0839 AricNesbitt@house.mi.govGilbert II, Judson (R) Algonac 517-373-1790 JudGilbert@house.mi.govDaley, Kevin (R) Lum 517-373-1800 KevinDaley@house.mi.govMuxlow, Paul (R) Brown city 517-373-0835 PaulMuxlow@house.mi.govDamrow, Kurt (R) Port Austin 517-373-0476 KurtDamrow@house.mi.govGlardon, Ben (R) Owosso 517-373-0841 BenGlardon@house.mi.govLyons, Lisa (R) Alto 517-373-0846 LisaLyons@house.mi.govCallton, Mike (R) Nashville 517-373-0842 MikeCallton@house.mi.govGenetski II, Robert (R) Saugatuck517-373-0836 BobGenetski@house.mi.govPrice, Amanda (R) Park Township 517-373-0838 AmandaPrice@house.mi.gov

MI House of RepresentativesContact List

Haveman, Joseph (R) Holland 517-373-0830 JosephHaveman@house.mi.govHughes, Holly (R) Montague 517-373-3436 HollyHughes@house.mi.govHovey-Wright, Marcia (D) Muskegon 517-373-2646 MarciaHoveyWright@house.mi.govOpsommer, Paul (R) Dewitt 517-373-1778 paulopsommer@house.mi.govHorn, Kenneth (R) Frankenmuth 517-373-0837 kennethhorn@house.mi.govOakes, Stacy (D) Saginaw 517-373-0152 StacyErwinOakes@house.mi.govBrunner, Charles (D) Bay City 517-373-0158 CharlesBrunner@house.mi.govJohnson, Joel (R) Clare 517-373-8962 JoelJohnson@house.mi.govStamas, Jim (R) Midland 517-373-1791 JimStamas@house.mi.govCotter, Kevin (R) Mount Pleasant 517-373-1789 KevinCotter@house.mi.govBumstead, Jon (R) Newaygo 517-373-7317 JonBumstead@house.mi.govFranz, Ray (R) Onekama 517-373-0825 RayFranz@house.mi.govPotvin, Phil (R) Cadillac 517-373-1747 PhilPotvin@house.mi.govRendon, Bruce (R) Lake City 517-373-3817 BruceRendon@house.mi.govSchmidt, Wayne (R) Traverse City 517-373-1766 WayneSchmidt@house.mi.gov

MI House of RepresentativesContact List

MacMaster, Greg (R) kewadin 517-373-0829 GregMacMaster@house.mi.govPettalia, Peter (R) Presque Isle 517-373-0833 PeterPettalia@house.mi.govFoster, Frank (R) Pellston 517-373-2629 FrankFoster@house.mi.govMcBroom, Ed (R) Vulcan 517-373-0156 EdMcBroom@house.mi.govLindberg, Steven (D) Marquette 517-373-0498 stevenlindberg@house.mi.govHuuki, Matt (R) Atlantic Mine 517-373-0850 MattHuuki@house.mi.gov