So-called “Macomb Solution” to get rid of mandatory car insurance in Michigan and allowing drivers to elect to be uninsured is epically bad idea; financial ruin if a car crash occurs

Macomb County Rep. Pete Lucido’s so-called Macomb Solution to allow drivers to elect to get rid of Michigan’s mandatory auto No Fault car insurance is a horrible idea.

Yet, six House politicians (4 of whom also represent Macomb County) have recently proposed just that.

This ill-conceived, poorly-thought-out, convoluted package of bills – House Bill 5627-5633 – is built around the central idea of ending the legal requirement that drivers purchase auto No Fault car insurance and giving these drivers the choice to elect to go without any auto insurance at all.

In the pantheon of bad ideas, this one’s epic.

This plan would shift millions of dollars in costs onto taxpayers and Medicaid to cover these uninsured drivers who then, inevitably, are involved in car accidents. It also leaves many people who may elect to drive uninsured with no idea of just how bad things will be for them if they do suffer serious personal injury. Finally, for all the people who do elect to purchase auto insurance, it leaves them exposed to personal and financial ruin if they are seriously injured by an uninsured driver (thanks to Pete Lucido’s Macomb Solution plan) but who did not also purchase optional uninsured motorist coverage to protect them from uninsured drivers. As a car accident lawyer, I should note that because this coverage is optional, and because insurance agents are under no legal or fiduciary obligation under Michigan law to even inform people that this coverage exists, there are hundreds of thousands or even millions of drivers who believe they are properly protected but who are not if they are involved in a car crash caused by an uninsured driver.

My sincere hope is that this is just an ill-conceived publicity stunt by Pete Lucido (R-Shelby Township), who, as the primary sponsor of House Bill 5627, appears to be the ringleader in the drive to let some drivers play Russian Roulette on our roads.

This is not the first time I have had to call out the Macomb Republican lawmaker on this auto law blog. Recall that in 2015, Rep. Lucido wanted to take $1 billion away from catastrophically injured Michigan car accident victims (money that was dutifully paid in by drivers as part of their insurance bill and was actively being used to pay present and future catastrophic medical costs) and give it to the Michigan Transportation Fund for road repairs. Thankfully, the bill died due to inaction at the conclusion of the 2015-2016 legislative session.

Macomb Solution to end mandatory auto No Fault car insurance may bring us some savings, but at too high a cost

This absurd plan is misleadingly called a “solution,” but it should be called playing insurance Russian Roulette.

Yes, folks who cancel their insurance will be able to put as much as $2,300 per vehicle per year back in their pockets, according to Insure.com’s “Car insurance rates by state, 2017 edition.”

But these newly uninsured-drivers-by-choice better hold tight and pray that they aren’t involved in a car accident.

Without the financial protection that insurance provides, they’ll need every penny of their so-called “savings” if they’re ever injured in a serious car crash.

And if these uninsured drivers cause a bad car accident?  As you’ll see below, the cost will wipe them out completely.

Uninsured drivers will suffer most if insurance is eliminated under Lucido’s Macomb Solution

Under House Bill 5627’s plan for a Michigan without mandatory car insurance, the outlook for uninsured drivers is bleak.

If an uninsured driver is injured in a car crash that’s not his fault, then here’s how things will unfold:

• The uninsured driver (i.e., the car crash victim) must sue the at-fault driver for everything: pain and suffering; full vehicle damage; medical expenses; lost wages; replacement services; attendant care.
• If the at-fault driver is also uninsured – and without sufficient personal assets to pay damages – then the uninsured victim won’t be able to collect anything. No pain and suffering. No vehicle damage repairs costs. No reimbursement for medical bills or lost wages. At best, the victim may be able to get medical bills paid if he has private health insurance or is eligible for Medicaid or Medicare. Beyond that, to the extent he gets any of the post-crash care and services he needs, he’ll have to pay out-of-pocket.
• If the at-fault driver is insured, however, then the uninsured victim won’t be able to sue him for much of anything. The No Fault threshold law would still apply, barring any claims for pain and suffering except where a “serious impairment of body function” could be shown; a recovery for vehicle damage would be limited to the $1,000 Mini Tort maximum; and, finally, the No Fault law’s abolishment of “tort liability” for the insured at-fault driver would prevent the victim from suing for medical or wage loss or anything else.

From there, things only get worse – much worse – if the uninsured driver is the one who was at-fault in causing a crash. That scenario would unfold as follows:

• The uninsured, at-fault driver could be sued for pain and suffering (with no No Fault threshold law to protect him); full vehicle damage; medical expenses; lost wages; replacement services; attendant care. It appears from the wording of HB 5627 that, even if No Fault covered the last four items, there’s nothing to stop a victim from “double-dipping” and suing the uninsured, at-fault driver for those same costs.
• If the uninsured, at-fault driver had also suffered disabling injuries in the car crash he caused, then, in addition to being financially responsible for the items above, he would also need to find a way to pay for his own medical care and treatment as well as replace or compensate for his lost wages or figure out a way to survive without a source of income.

Only 2 states do not have mandatory car insurance requirements – but they weren’t so extreme as to enact their own Macomb Solution

Only two states (Virginia and New Hampshire) have gone down this road – and they weren’t as no-holds-barred as this Macomb Solution package of bills aspires to take Michigan.

Proponents of HB 5627 might point to Virginia and New Hampshire – which the Insurance Information Institute describes as “rare exceptions to compulsory auto insurance laws” – as models for their proposed elimination of a mandatory insurance requirement in Michigan.

However, as politicians are prone to do, they wouldn’t be telling the whole story.

While drivers in Virginia are not required to obtain car insurance, if they choose not to, they must pay a $500 “uninsured motor vehicle fee” to the state. (See Code of Virginia 46.2-706)

Similarly, “New Hampshire Motor Vehicle Laws do not require you to carry Auto Insurance, but you must be able to demonstrate that you are able to provide sufficient funds to meet New Hampshire Motor Vehicle Financial Responsibility Requirements in the event of an “at-fault” accident [i.e., if you’re an uninsured driver and you’re at-fault in causing a car accident]. If you are unable to meet these requirements your driving privileges in New Hampshire may be suspended.” (State of New Hampshire’s Insurance Department, “Your Guide to Understanding Auto Insurance in the Granite State”)

In my follow-up blog post coming soon, I will dig deeper into the details of HB 5627 to discuss the future of No Fault, caps on benefits and the Michigan Catastrophic Claims Association (MCCA).