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State House panel set to move forward no-fault overhaul

two cars in a rear ending accident
Steve Carmody
Michigan Radio
Opps. A fender bender in Ann Arbor. Michiganders spend a lot for auto insurance.

A proposed overhaul of Michigan’s no-fault auto insurance system has cleared its first legislative hurdle. A state House panel passed the bill on a party-line vote, with Democrats all voting "no."

Right now, people who are severely injured in an auto accident can get unlimited lifetime medical benefits.

The legislation would cap those benefits at a million dollars.

Many people who testified against the bill said people who are already injured would lose benefits they were promised.

House Insurance Committee Chair Pete Lund (R-Shelby Township) says that’s not true, “people who are currently in the system will receive the same benefits, unlimited, the way it is currently set up. The only difference would be that the people providing the care would receive compensation more according with the new rules.”

The committee made a number of changes to the bill. Among other things, it removed a cap on how much people can claim for home and vehicle modifications related to their injuries.

"We just want to make sure that it’s perfectly clear that what we said this bill does, make sure that’s what it does. So it’s really clarifying. There’s not major changes, a couple of minor changes that we’ll go over. But for the most part it’s just making sure that the bill does what we’ve told everyone it’s going to do," said Lund.

But Committee Vice Chair Kate Segal (D-Battle Creek) says that and other changes are not enough to protect the severely injured.

“Does that help families a little bit? Yeah. Are they going to be able to take advantage of those? Probably not, because that million-dollar cap, it comes really quickly,” said Segal.

The bill now goes to the floor of the state House.

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