Delay, Deny, Defend

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Devin Kalisz was an active 24-year-old mother of twins when she stopped at a red light in Lake Orion. It was 2006. In her rearview mirror, Kalisz saw a Chevrolet S10 pickup coming up very fast behind her and thought, “this girl is not going to stop.”

The rear-end collision did minimal damage to Kalisz’s Ford F10 pickup, but Kalisz wasn’t so fortunate. Her head crashed into the steering wheel, and the sudden pain in her head was unlike anything she had experienced before. “That was the beginning of the end of life as I knew it,” Kalisz recalls.

As serious as Kalisz’s injuries were, her real ordeal was dealing with the insurance company. Her case and others illustrate what is needed to improve the state’s widely lauded no-fault auto insurance system.

As it stands, Michigan is the only state that mandates insurance companies to provide unlimited, lifetime medical benefits to motorists injured in auto accidents. While the no-fault benefits Michigan policyholders receive far outpace benefits available in other states, the operation of the program is often riddled with frustration and impediments to recovery.

Insurers and policy holders routinely face each other in court over benefit claims that insurers say drive up the cost of premiums, and leave them with no choice but to carefully scrutinize every case.

Plaintiffs’ attorneys allege the industry is far more calculating and cunning than it acknowledges.

They say insurers routinely engage in the wholesale and arbitrary denial of claims, understanding that a claimant’s only recourse is through the court system, where the insurer’s liability can be limited and its chances of outlasting claimants — if not actually winning — are good. Short of a trial, insurance firms have been known to make low-ball settlement offers to unsuspecting victims in hopes they won’t pursue legal advice, say plaintiff attorneys.

Most disconcerting is that some insurance companies delay paying accident victims in the hopes that they will die. Such practices were featured in John Grisham’s 2005 book, The Rainmaker, and a subsequent movie by the same name directed by Francis Ford Coppola and starring Matt Damon, Danny DiVito, and Danny Glover.

In other instances, insurers quietly seek the claimant’s agreement to a denial of claims, which completely undermines Michigan’s well-regarded no-fault system. Dairyland Insurance Co., which has its headquarters in Stevens Point, Wis., will send a release of liability form to its own injured customers that, if signed, extinguishes their legal rights — past, present, and future (often just seven days after a crash) — in exchange for merely paying off the claimant’s deductible.

“When the auto insurance firms say they have low profit margins, keep in mind that their (combined) annual profits are in the billions of dollars,” says Michael Morse, owner and president of Michael Morse PC in Southfield, the state’s largest auto accident plaintiff’s firm. “The insurance companies are more than willing to lose 10 percent of the claims (those that are successfully challenged or settled in court) knowing that the other 90 percent are never challenged. Those victims just learn to live with the injuries or wind up on Medicaid, which doesn’t come close to matching the medical treatment they would get in the private insurance system.”

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