(WJBK) - Your insurance card is the first thing you pull out when you get into an accident, but the kind of insurance you have makes a huge difference.
Right now, there two types: a pure tort system, and no-fault insurance (which is what we have here in Michigan). Republican lawmakers have introduced a new bill, though, in hopes of an overhaul. The overhaul would mean insurance rates would go down by about half -- but catastrophic payouts would be less.
Their plan is to scrap the current no-fault system that provides unlimited medical coverage if you're hurt in a crash. The idea behind it is to save you money each month -- but at what cost?
Steve Gursten with Michigan Auto Law explains the big difference between pure tort and no-fault insurance.
"In a pure tort state, you're going to get compensated for a broken wrist. In Michigan, depending on how that broken wrist has impaired your life, you may get compensation or you may get nothing."
The cost of insurance in Michigan is another reason the co-sponsor of the bill says it's time to repeal Michigan's no fault system.
"We are the highest cost insurance auto insurance in the country because of the cost drivers in the system, which are unlimited lifetime medical care that costs exorbitant rates by comparison for what health care costs for the same thing. Repealing it actually makes a lot of sense," argues State Rep. Lana Theis.
Proponents of the no-fault system point to the benefits, which include:
- All medical care for a lifetime
- Wage loss up to three years
- Replacement services
- At-home care
- Medical mileage
But all that, of course, comes with a price.
"With a pure tort state, people's auto insurance rates drops by more than half, overnight. No-fault is great, but, it's expensive and people don't really understand the benefit that it offers until normally it's too late and they've been injured in a car accident," Gursten says.
Half of Detroit's population is said to be uninsured, Gursten points out. More than a million drivers in Michigan are uninsured, something supporters of this latest bill argue is the reason for change.
But Lansing correspondent Tim Skubick says this is an uphill battle.
"They are complaining about the high cost of insurance but they're not saying change the no-fault system. So going back to a tort system might be DOA, at least one Detroit lawmaker told me that earlier today," he said.
FOX 2 reached out to Mayor Mike Duggan's office for comment but was unavailable as he's out of town right now. He's a proponent for insurance reform in the City of Detroit, and recently introduced a new insurance a few months ago. It was defeated.