DISRUPTED LIVES HOLD LINE ON INFLATION

In the Year of Our Lord 1973, the average price of a gallon of gas was 40 cents, having nearly doubled in price since 1970. The average cost of a new house was $32,500, a new American Motors Javelin cost $2,900, and the Dow Jones Industrial Average closed the year at 850. Average monthly rent was $175, and an average yearly wage was $12,900. Popular movies included Jesus Christ Superstar and Last Tango in Paris. The World Trade Center became the world's tallest building. There were no personal computers or cell phones.

In addition, here in Michigan, 1973 introduced the no-fault auto insurance system we still have with us. We must all insure our vehicles as a condition of operating them on the roads of this state. We must provide coverage for ourselves for wage loss, medical expenses and collision damage, caused by an auto accident, no matter whose fault it was. Collision coverage is not mandatory, however, which is often a bit of bad news for the innocent accident victim. Buying full collision coverage on an old car is often a poor bargain, but the negligent driver who caused the accident is not liable for the cost of repair to the victim's car beyond the possible maximum and princely sum, of $500. That part of the insurance scheme is often hard to explain to Mr. and Mrs. John Q. Public, who no longer have a car to go to work, through no fault of their own.

In such cases Mr. or Mrs. John Q may ask an attorney: "Do you mean to tell me, that guy ran a red light, hit me, hurt me badly, destroyed my car, and nothing happens?" It is then that the attorney responds: "No, that is not true. If this man hurt you very, very badly, the Michigan No-fault law requires that he have insurance that might sometime, possibly, but probably won't provide you with much, if any, protection if your life is disrupted by your injuries."

There is generally a longish pause after this statement, while Mr. and Mrs. Public try to comprehend its logic (they won't). The attorney then tries to explain the current state of the law, that negligent drivers are theoretically responsible for the disruption, pain, suffering and anguish caused by their carelessness. Then the attorney tries to explain the realities of the current judicial interpretation of auto negligence law. That victims with serious fractures, requiring surgery, with serious back injuries requiring surgery, with injuries requiring months, if not years, off work, are not considered to be injured seriously enough to hold the negligent driver responsible.

The attorney can then go on to tell Mr. Public, the injured man, how, though everyone agrees that his pain is real, it is considered legally irrelevant, because, unless his injuries, much less his pain, can be measured by a machine, Michigan law will assume he is lying. And finally, he can tell Mr. Public, that he can't be trusted to know when his injuries require him to stop doing any of the dozens of activities that make up daily living. If after raking leaves for 10 minutes, Mr. Public has extreme pain that then lays him up for a week, Mr. Public might stop raking leaves. This, under Michigan law, means nothing, because, unless Mr. Public's doctor specifically restricts Mr. Public from raking leaves(or lifting his kids, or changing his oil, or shooting hoops in his yard, etc, etc.), he is apparently "wimping out" if he can't do his daily activities. As an aside, if an injury prevents someone from sleeping, how would a doctor's restriction work? Does he restrict the injured party from getting a fully night's sleep? Does he restrict the person to not getting a full night's sleep? These are legal issues the likes of me cannot figure out. Or maybe the principles underlying auto negligence law are these: 1. Don't believe anyone. 2. No one can be seriously injured if he can maintain, post-accident, the level of activity of a paperweight. 3. The courts are full of frivolous lawsuits. 4. A frivolous lawsuit is one brought by everyone else but me. (This last is called the "Bork Thesis".)

This, seamlessly, brings me back to the original topic of this piece. As part of the No-Fault law all drivers are required to buy insurance in case they should injure a person or persons due to their negligence. Such claims could involve non-economic or excess economic loss. The State of Michigan has determined the minimum amount of coverage a driver must have to protect himself from the kind of injury claims Michigan Courts have held to meet the judicial minimum definition of a serious injury. If the injury is not serious, the insurance company pays nothing. Way back in 1973, when the cost of living and the injury threshold was much lower, the minimum insurance limit was $20,000 per person, $40,000 per occurrence. The State legislature, in its wisdom then, determined that this much insurance would provide protection to a driver from most of the claims that might occur due to injuries caused by his carelessness. Not all, but most. Certainly the legislature was concerned that Michigan drivers had adequate protection for themselves. (And, as an afterthought, Michigan accident victims as well).

Now it is 35 years later. The average price of a home is $212,800. A new car costs $28,000 on average, with the price of gas at or above $3 a gallon. The minimum definition of serious injury has certainly increased. Legislators' salaries and auto insurance premiums have increased. And where has the Michigan State Legislature set the minimum level of protection a Michigan driver needs. It is unchanged. $20,000 is was and $20,000 it remains.

If the Michigan Courts have held that a negligent driver (and so, his insurance company) are only responsible for catastrophic, life altering injuries, just how much protection does $20,000 in coverage provide a driver who may have been nothing more than momentarily inattentive. Not much. Why, then hasn't the State Legislature taken action to increase the minimum policy limits, and increase the protections provided to all Michigan drivers. Truth is that the insurance company fights such legislation at every turn.

Some of my defense attorney friends have told me that if the policy limits were raised, premiums would increase and more people would drive without insurance. I really didn't think that was the case, but I did a little investigative work with my own auto carrier. I carry $250,000 liability and property damage coverage, 12 1/2 times the coverage required by state law. How much would I save if I reduced my coverage to the minimum? $40 every six months, a lot less than 10% of my premium. So, I assume that $100,000 in coverage would cost less than $20. I pay more than that for the privilege of getting my $250 collision deductible waived if I am not at fault in an accident.

Why would the insurance industry fight increasing limits if the coverage doesn't cost much / Here is the reason. I have had this conversation many times in my career:

Adjuster: Our insured just turned over your retention letter. Tragic.
Butler: Yes. Ms. Smith was a single mother with two young children. The family doesn't know what it is going to do now that she has died.
Adjuster: Our insured, Mr. Jones is devastated by this. He was changing the radio station and didn't see your client stopped at the light in time. He broke his arm in the accident and we are paying his wage loss. He has dropped out of school.
Butler: I need to know...
Adjuster: I have a 20.

Jones probably bought the cheapest policy he could get that met state requirements. $20 more could have bought a $100,000 in coverage. He saved $20, but his insurance company saved $79,980 on this claim. No further responsibility to the deceased, her family, or its own insured. Butler could get an excess judgment against Jones that could devastate him financially for decades.

Our legislature is joining our courts in doing a poor job in protecting Michigan citizens. Insurance companies are taking premiums from their own insureds and not providing real protection. The only real protection seems to be for insurance company profits. The price of everything else has gone up since 1973. Perhaps we should thank the insurance industry and the Michigan legislature for holding the line on the price of human suffering.

It seems appropriate to quote a lyric from a 1973 vintage Emerson, Lake and Palmer song, which has recently resurfaced in an otherwise awful Dr. Pepper commercial:

"Welcome back my friends, to a show that never ends."