Motorists across Michigan are receiving refund checks from their auto insurers, a turnabout that some pundits would say is a sure sign of the apocalypse.
Insurance companies, which for years have been rightly or wrongly accused of gouging motorists when it comes to insuring their vehicles, reportedly are mailing or direct depositing $400 refunds to drivers as part of the 2019 passage of the automobile no-fault insurance reform bill in Michigan.
The hotly-debated reform package, which was pushed by insurance companies and the Republican-controlled Michigan Legislature, was designed to cut auto insurance rates by ending mandatory lifetime coverage for crash victims and establishing new fee limits for medical treatment.
The cost-cutting reportedly resulted in a $5 billion surplus for the Michigan Catastrophic Claims Association, which under political pressure released $3 billion of that savings to be refunded to vehicle owners. The refunds should arrive no later than May 9, according to state officials.
So, for those who are overjoyed at receiving the $400 per-vehicle refund, consider that there is a decided downside to the unexpected gifts.
I received a preview of that “coming attraction” several years ago while writing a feature story on attorney Nick Andrews, a partner in the Bloomfield Hills firm of Liss Seder & Andrews. The firm specializes in no-fault litigation involving catastrophic brain or spinal cord injuries, representing plaintiffs who have suffered life-altering injuries in vehicle accidents.
Andrews told me of a 2017 case in which he represented accident victim Avoryonna Harper and her mother, Marian Idziak, in an action against USAA Casualty Insurance Co. and the Michigan Catastrophic Claims Association (MCCA).
The case stemmed from a May 2017 accident in which the 21-year-old Harper was a passenger on a motorcycle. The crash, which investigators said was caused by the intoxicated driver of the motorcycle, left Harper with a traumatic brain injury and an inability to perform basic functions.
“Avory was profoundly injured in the accident with the car, leaving her in the 1 percentile range for memory and virtually no inhibitions when it comes to behavior,” said Andrews. “In effect, she is a child in an adult’s body.
“She spent several months in a rehabilitation facility, then a step-down facility, before she ended up in the care of her mother at home,” Andrews indicated.
The plaintiff was prescribed 24-hour attendant care in the home setting, according to Andrews, but USAA failed to pay any benefits before the claim was assigned to an adjuster.
“This went on for several months before our firm got involved, causing great financial hardship for the family,” Andrews said. “They had to move out of their apartment because they couldn’t pay the rent, ending up in a motel that, shall we say, was less than desirable. It was an absolute nightmare for them.”
After a default ruling was issued against USAA for failure to respond to the complaint in a timely fashion, the insurance company finally filed an affidavit that it would mount a defense, according to Andrews.
“But the delays continued through the discovery process, causing even more financial hardship on our client,” said Andrews.
As the case proceeded to trial, Andrews cross-examined one of the defense’s expert witnesses, who after five hours of testimony decided to withdraw from the case after it became clear to her that the level of care that the plaintiff needed would cost far more than what USAA was offering.
“When your own expert witness decides to bow out of the case, that’s a pretty strong indication that you’re headed down the wrong road,” Andrews said of the defendant’s legal strategy.
In April 2019, the case was tried before Oakland County Circuit Judge Cheryl Matthews with the plaintiff’s doctor and mother serving as key witnesses, Andrews indicated.
“Avory’s doctor was a terrific witness, speaking in plain and understandable terms about her condition and how much attendant care she will need for the rest of her life,” Andrews related. “Her mom, who was very nervous about testifying, was even more compelling on the witness stand, describing in detail the challenges she and other care-givers face 24 hours a day with Avory. There wasn’t a dry eye in the courtroom at times as she described the sacrifices she has made to provide care for her daughter.”
After a three-day trial, the jury returned a verdict in favor of the plaintiff, setting a $33 hourly rate for attendant care, nearly three times the $12 per hour rate the insurer initially paid, indicated Andrews, who said the case could have been settled for less had the MCCA not forced the case to trial. The rate was ordered paid retroactive to February 19, 2018.
And while the legal triumph was sweet for the plaintiff, the afterglow was dampened in late May 2019 when the State Legislature passed a no-fault reform bill, said Andrews.
“This new law does not fully protect victims involved in catastrophic loss cases,” Andrews contended several years ago. “The legislation completely missed the mark in situations where attendant care is provided by a loved one.”
Andrews said that the new law fails to take into account that “long term patients always do better in the home environment, where their quality of life is enhanced” by receiving care from a family member.
“Under the new law, Avory won’t be able to have her mother provide care for more than 56 hours a week,” Andrews explained. “The remaining time, 112 hours, will have to be covered by someone from the outside, someone who undoubtedly will not be as attentive and compassionate as Avory’s mom.”
This provision of the bill took effect July 1, 2021 and will “leave thousands of patients like Avory” in the lurch as they seek adequate attendant care, according to Andrews.
“This is another case of the State Legislature doing something in haste that will have unintended consequences for many of our most vulnerable citizens,” Andrews proclaimed at the time. “Whatever minimal cost savings there will be for consumers on their auto insurance policies, the cost will be enormous for those accident victims needing long term medical care. At this point, there is no way to put a price on the suffering they will experience from this bill.”
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