FOR IMMEDIATE RELEASE
September 30, 2009 
Contact: Jason Moon 517-335-1700

LANSING – Yesterday Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross held a public hearing to gather information and to receive comment on uninsured and/or underinsured (UM/UIM) motorist coverage. OFIR heard from a number of attorneys for consumers with complaints about problems encountered by injured persons who try to recover benefits under their UM or UIM policy riders. The complaints included concerns that insurance companies are requiring injured consumers to prove that the at-fault party is uninsured without any way to prove this fact, that terms of insurance contracts are unclear, deceptive, and illusory, and that UM/UIM coverage is being unlawfully set-off by No-Fault coverage.

“The testimony lines up with complaints that we’ve received that insurers were using ‘gotcha’ clauses to deny benefits to injured consumers,” Ross said. “Consumers are encouraged to continue to send their written comments until Monday.”

Written comments may be submitted before 5:00 P.M. on Monday, October, 5, 2009.via email: Kobusd@michigan.gov, fax: 517-335-3157 or mail at: OFIR, Office of General Counsel, P.O. Box 30220, Lansing MI 48909. In all responses, where applicable, consumers should include a copy of the UM/UIM endorsement or rider being referenced.  

Under Michigan’s No-Fault law, car owners and drivers must purchase automobile insurance and, in case of an accident, their own insurance company will pay all reasonable expenses for injuries and for up to three years of lost work income.  Some types of damages are not covered, such as pain and suffering; but in limited circumstances, the injured person may bring a lawsuit to recover damages against the other, at-fault driver. 

However, if the at-fault driver is uninsured or does not have enough insurance, the injured person is not likely to recover anything in a law suit.  That is why many insurance companies now offer Uninsured Motorist (UM) or Underinsured Motorist (UIM) coverage by rider to the basic no-fault policy.  With this coverage, the policyholder may look to his or her own insurance company for coverage of additional losses.

OFIR invites all persons who may have been affected by UM or UIM issues, as well as those who have specialized knowledge of the issues and other interested parties to share their knowledge and understanding on the following issues and others:

1.  Misleading or deceptive UM/UIM endorsements or riders.

2.  Unreasonable restrictions or exclusions from coverage.

3.  Any experience with an UM/UIM claim fully or partially denied by an insurer.

4.  Unreasonable time limitations for filing an UM/UIM claim.

5.  A requirement that the insured must file suit and receive payment from the at-fault driver and/or other sources before making an UM/UIM claim or before filing suit against the UM/UIM insurer.

6.  A requirement that UM/UIM benefits be reduced or excluded because of benefits received from other sources such as personal injury protection (PIP), liability or health coverage, workers’ compensation, or governmental benefits. 

7.  A requirement that UN/UIM benefits be offset for unlike types of damages.

8.  UM/UIM clauses limiting coverage to persons occupying vehicles and pedestrians, thereby excluding children on bicycles or scooters or anyone else hit by a vehicle while not walking or riding in a vehicle.  

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