Michigan Auto Insurance Changes Won’t Apply to Seriously Injured Persons Until Summer 2019


DETROIT – Major changes to Michigan’s auto insurance law do not apply to people who were catastrophically injured before the summer of 2019, the state appeals court said Thursday, a victory for victims long-term motor vehicle accident victims and their care providers.

In a 2-to-1 opinion, the court said lawmakers “did not clearly demonstrate” that the insurance payout cuts would be applied retroactively.

And even if these changes were to be retroactive, this step violates the contractual protections of Michigan’s Constitution, Judge Douglas Shapiro wrote.

“Giving a windfall to insurance companies that have received premiums for unlimited benefits is not a legitimate public purpose, nor a reasonable way to reform the system,” Shapiro said in a decision joined by Judge Sima Patel.

In an effort to reduce Michigan’s insurance rates, which were among the highest in the United States, the Republican-controlled legislature and Democratic Governor Gretchen Whitmer agreed to sweeping changes in 2019.

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For decades, people injured in accidents were entitled to payment of “all reasonable expenses” related to care and rehabilitation. But the new law sets a fee schedule and a ceiling for reimbursements not covered by health insurance.

This had dramatic consequences for approximately 18,000 people requiring long-term care after accidents that occurred before June 11, 2019 and the providers of these services.

Hockey star Vladimir Konstantinov suffered severe brain damage when a drunk limo driver crashed the car in 1997. Konstantinov, a passenger, was celebrating an NHL Detroit Red Wings championship.

Last spring, Arcadia Home Care & Staffing said it lost $200,000 for Konstantinov’s care due to the 2019 law.

“Every month I have to ask if we’re good for another month,” said James Bellanca Jr., Konstantinov’s friend and attorney.

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“The ruling is a godsend,” he said of the court’s decision.

There will be no immediate relief. An appeal to the Michigan Supreme Court is planned, according to the Insurance Alliance of Michigan, which represents insurance companies.

“Michigans have come too far to return to the days of unaffordable auto insurance, fraud and rampant medical overload,” said general manager Erin McDonough.

The Legislature could change the law to help long-term crash victims, though Republican leaders have been unwilling to act, despite protests on the Capitol steps.

The lawsuit was filed on behalf of two people who were permanently disabled after accidents. Ellen Andary needs 24-hour care at home, while Philip Krueger lives at the Eisenhower Center in Ann Arbor.

In a dissenting opinion, appeals court judge Jane Markey said the legislature’s decision should be respected, even if it was “not unsympathetic” to injured motorists.

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“I find nothing arbitrary or irrational in the Michigan Legislature taking action to make no-fault insurance, which is mandatory for owners or registrants of motor vehicles, as affordable as possible of Michiganders as possible,” Markey said.


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