Michigan governor Rick Snyder has proposed a change in Michigan’s auto insurance benefits that would change the current unlimited benefit to one having a cap of $1,000,000 for an individual. Today’s system requires a $175 per vehicle annual fee be paid to the Michigan Catastrophic Claims Association (MCCA) to pay for those most seriously injured in automobile accidents.
Today’s Detroit News story on Governor Snyder’s proposal explains the trade-offs in the proposal. Rates are expected to fall $125 per vehicle – for the first year only – as part of the plan. After that, rates would again be subject to market pricing by the insurance companies. The governor’s plan also proposes a fee schedule for benefits similar to that of Worker’s Compensation. At the current time, there is no fee scheduled for auto accident related benefits, so services performed can cost 2-3 times more if done in relation to an auto claim.
So what happens under the new plan if you are seriously injured and $1,000,000 is not enough to cover the costs? The answer from this plan is that you would be covered by Medicaid. Opponents of the plan say that this is not a good approach as you would be essentially causing people to go bankrupt so that they could obtain the ongoing Medicaid benefits.
So for those of you with 2 cars, is it worth $250 per year cash in your pocket for these benefit changes? Or are you more comfortable with the current system, even though Michigan’s rates are the highest in the country?