LANSING, Mich. (Michigan New Source) – In March of 2022, eight months before the election, Michigan Governor Gretchen Whitmer announced that refund checks would be sent to Michigan residents in the form of auto
insurance rebates of $400 per vehicle.

The money came from a $3 billion surplus from the Michigan Catastrophic Claims Association at the expense of car crash victims who were promised unlimited lifetime care benefits and were no longer going to get them from that fund.

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In a recent 2-1 decision from a Michigan Court of Appeals panel, the ruling said that lawmakers who reformed the 1973 Michigan No-Fault Auto Insurance Law in 2019 and restricted benefits to car crash victims, did not “clearly demonstrate” that insurance payment cuts would be applied retroactively and Judge Douglas Shapiro also stated that the cuts violated contract protections in the Michigan Constitution.

The insurance reform no longer included unlimited lifetime payments for the care of car crash victims who had already signed a contract with insurance companies in exchange for paying their premiums. Payments for “all reasonable charges” related to the care and rehabilitation for people injured in crashes turned into fee schedules and caps on reimbursements.

Judge Shapiro said in the recent court ruling, “Giving a windfall to insurance companies who received premiums for unlimited benefits is not a legitimate public purpose, nor a reasonable means to reform the system.”

The auto insurance reform legislation was an alliance between the insurance companies, Michigan Governor Gretchen Whitmer and Michigan Republicans in the House and Senate with the politicians saying that the goal was to reduce Michigan’s auto insurance costs which were the highest in the nation. The new rules allow current auto insurance customers to opt out of the unlimited Personal Injury Protection (PIP) coverage.

However, according to The Zebra, a national auto insurance comparison site, the calculated average yearly cost of purchasing car insurance in Michigan still went up from $2,535 in 2020 to $2,639 in 2021. The nationwide average is $1,529 a year for an annual premium.

The changes in the legislation resulted in car crash victims having to leave their homes and go into nursing homes, the closing of rehab centers and in-home care service providers dropping patients.

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18,000 victims who were involved in crashes before June 11, 2019 will continue to wait for a final decision on the case which will likely end up decided in Michigan Supreme Court.

Erin McDonough, Executive Director of the Insurance Alliance of Michigan, the representative of the insurance companies, said, “Michiganders have come too far to turn back to the days of unaffordable auto insurance, fraud and rampant medical overcharging.”

In a similar statement which shows a disregard to contract law, dissenter Judge Jane Market said, “I find nothing arbitrary or irrational about the Michigan legislature taking steps to make no-fault insurance, which is mandatory for owners or registrants of motor vehicles, as affordable as possible for as many Michiganders as possible.”