Ran off the road, in Michigan

[alnorth]

I understand that people go through their own insurance company regardless of fault. My question was when your own insurance company would pay for your damage. I would have thought that such damage would be paid for if you weren't at fault. If not, it's crazy not to have collision insurance, unless your vehicle is truly worthless.

Thats the whole point of Collision coverage. If you dont have it, your own insurance company doesnt pay a nickle for your car, and in MI youll only get $500 from the other company.

What industry dirtbag insider came up with that?

What possible consumer interest could be served by such a system?

The insurance company didnt write the law, and they would probably prefer MI to be a "normal" state if it was up to them.

The theory behind this is that if your own insurance company pays for your damages, then it would reduce the number of lawsuits filed between drivers seeking money from one another and free up the courts. This isnt some insurance lobbying conspiracy, at some point in time the people of Michigan thought this would be a brilliant idea.

 

[xylene]

The insurance company didnt write the law, and they would probably prefer MI to be a "normal" state if it was up to them.

The theory behind this is that if your own insurance company pays for your damages, then it would reduce the number of lawsuits filed between drivers seeking money from one another and free up the courts. This isnt some insurance lobbying conspiracy, at some point in time the people of Michigan thought this would be a brilliant idea.

Lobbying is not a conspiracy. In fact the words are kind of antonyms. Just want you to know that.

Limiting peoples access to the courts is the direct consequence of the law. Thats plain enought. My point was one of rhetoric - what consumer interest is served? You didn't present anything on that. You didn't even venture a coherent point on why the insurance company would prefer another system.

"Free up the courts"

 

[ForFun]

Thats the whole point of Collision coverage. If you dont have it, your own insurance company doesnt pay a nickle for your car, and in MI youll only get $500 from the other company.

It would have been nice if the legislatures had stipulated that a person's own minimum coverage pays for his vehicle if he wasn't at fault, or would allow lawsuits against the at fault driver for property damage beyond $500.

The current system not only lets people off the hook when they negligently damage another's vehicle, but it prevents low income people who can't afford collision insurance to be made whole again after another's negligence.

 

[alnorth]

Lobbying is not a conspiracy. In fact the words are kind of antonyms. Just want you to know that.

Limiting peoples access to the courts is the direct consequence of the law. Thats plain enought. My point was one of rhetoric - what consumer interest is served? You didn't present anything on that. You didn't even venture a coherent point on why the insurance company would prefer another system.

"Free up the courts"

I wont argue on consumer interest, because I personally agree with you, this idea is idiotic, and I prefer the guilty and irresponsible parties to be held accountable.

As for why the insurance company prefers an at-fault system, it makes the underwriting a lot more effective and reliable. In a no-fault state you could have the best driver in the world, but he could get hit by several bad drivers and file several collision and Personal Injury claims that the insurance company would have to pay with no ability to go after the other insurance company to get their money back. In an at-fault state, if your good driver gets hurt, the other company pays for the injury, and if you have to pay for his car, you can get that money back by subrogating against the other insurance company. If the insurance company discovers they have a bad driver in an at-fault state, they can cancel him or write him in a substandard auto program to get more money in premiums for the higher risk.

In an at-fault state the insurance company is rewarded for having better drivers and punished for having poor drivers. The insurance company can also justify charging higher rates for the bad drivers.

In a no-fault state, the bad drivers are only a little more expensive than good drivers, so you dont see a big benefit from your underwriting efforts like you would in an at-fault state. In a no-fault state you also cant justify a high premium for the bad drivers in a substandard program.

 

[alnorth]

It would have been nice if the legislatures had stipulated that a person's own minimum coverage pays for his vehicle if he wasn't at fault, or would allow lawsuits against the at fault driver for property damage beyond $500.

The current system not only lets people off the hook when they negligently damage another's vehicle, but it prevents low income people who can't afford collision insurance to be made whole again after another's negligence.

There is no minimum coverage for property damage on your own car. Some people want to save money by having only liability, and accept the risk that they will have to buy a new car if its wrecked. Even a minimum coverage for Collision would cause the premium to become unaffordable for many poor people.

 

[ecmst12]

The current system not only lets people off the hook when they negligently damage another's vehicle, but it prevents low income people who can't afford collision insurance to be made whole again after another's negligence.

You're right. And that's why I'm not planning on moving to Michigan anytime soon!