Previously injured individuals cannot benefit from key provisions of auto insurance reform.

Michigan Supreme Court Rules Key Provision of Auto Insurance Law Does Not Apply Retroactively

The Michigan Supreme Court has made a ruling regarding a key provision of the 2019 law reforming Michigan’s no-fault auto insurance system. In a 5-2 decision, the court determined that the provision does not apply to individuals who were injured prior to the law’s passage. This decision strikes at a significant cost-saving component of the legislation, although it does not completely eliminate it.

The court found that the 2019 no-fault auto insurance law was not intended to be applied retroactively to individuals injured before June 11, 2019. According to the justices, those who were injured prior to that date have contractual and statutory protections that were in place when they were injured, and they should be shielded from fee cuts that are crucial to the effectiveness of the law.

Justice Elizabeth Welch, who wrote the majority opinion, stated that the insurance policies and statutes in effect at the time of the injuries determine the individuals’ entitlement to Personal Injury Protection (PIP) benefits, not the amended provisions of the 2019 law.

Justices David Viviano and Brian Zahra dissented, arguing that the majority’s decision violated the constitutional separation of powers. They claimed that the decision ignored a “reasonable reading” and instead relied on vague and open-ended concepts such as vested rights. Viviano expressed concern that the cost-reducing effects of the reforms passed by the Legislature and signed into law by the Governor would not be fully realized for many decades.

The ruling is expected to impact the savings on premiums that the law aimed to provide. One attorney compared the decision to pulling a thread on a sweater, suggesting that it could unravel the entire system.

The case, Andary v. USAA Casualty, challenged the 2019 no-fault auto insurance reform by arguing that cost restraints, such as limiting reimbursable family care to 56 hours a week and reducing care provider fees by 45%, cannot be applied retroactively to crash victims injured before the reforms took effect. The lawyers argued that the retroactive application was not intended by the Legislature and, if it was, it violated the contractual rights of those injured.

The auto insurance reform was passed in 2019 by Governor Gretchen Whitmer and the then-Republican-led Legislature with the goal of lowering Michigan’s highest-in-the-nation insurance premiums. The changes allowed individuals to choose lower tiers of coverage and implemented cost containment measures for previously unlimited medical benefits. These measures included limiting reimbursable family care and reducing care provider fees. Proponents of the law believed that these caps would define what constitutes “reasonable” care for injured motorists.

However, the implementation of the fee cuts and family care limits in July 2021 led to numerous complaints. Some care provider companies closed, and there were disputes and delays in billing. In August, the Michigan Court of Appeals ruled that the fee cuts and family care limits were not meant to be applied retroactively and that such application would violate the state Constitution’s contract clause.

This recent ruling by the Michigan Supreme Court reaffirms that injured individuals who were covered by insurance policies and statutory protections in effect before June 11, 2019, should be shielded from the fee cuts outlined in the 2019 auto insurance reform. The decision has implications for the cost-saving goals of the legislation and could have long-term effects on the state’s auto insurance system.

Original Article: [Detroit News](https://www.detroitnews.com/story/news/local/michigan/2021/11/29/michigan-supreme-court-rules-key-no-fault-auto-insurance-provision-doesnt-apply-retroactively/8795488002/)

Original Story at www.detroitnews.com – 2023-07-31 13:07:18