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Michigan Drivers Face Insurance Rate Hike

The Michigan Catastrophic Claims Association announces that motorists will see a $30 increase per vehicle.

Michigan motorists beware: The cost of driving won't just be going up this summer because of gas prices. The Michigan Catastrophic Claims Association announced that auto insurance, mandatory for every vehicle on the roadways, will increase by $30 for each policy on July 1.

The 21 percent increase — to $175 per vehicle — is the highest in the history of a state fund that covers claims for unlimited lifetime medical benefits under Michigan's no-fault auto insurance law, the Detroit Free Press reported.

That fund is adjusted annually. Of the $175, $141.93 is to cover claims, $32.72 is to address a long-term deficit in the fund, and 35 cents is for administrative costs, according to the Free Press.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, told the Free Press that the cost of medical care for auto accident victims has risen 166 percent since 2002. Those costs are getting passed along to all drivers, he said, which "validates our calls for reform."

Patch reader Ron Dwyer, an insurance agent based in Waterford, agrees.

"As an insurance agent I can tell you Michigan's auto insurance rates are one of the highest in the nation," he wrote on the Bloomfield Patch Facebook Page. "No-fault law was to have kept our rates low, but with loop holes in the system and unlimited benefits our rates keep rising to astronomical levels. Legislators in Lansing are looking at plans that will put optional caps on coverage to help lower costs. To be paying $ 175 per vehicle to the Michigan Catastrophic Claims Association is ludicrous!"

But the reforms shouldn't be limited to insurance, he added.

"We must also get reforms in our health care. Insurance companies usually pay twice as much if not more for health care. Some of these costs are mandated! Why should an insurance company be forced to pay twice as much for health care? These costs get passed on to you and I," Dwyer wrote.

Legislators quoted by the Free Press indicate the increase is sure to add to the ongoing debate in Lansing about whether the MCCA needs more transparency and that the no-fault law needs changes.

Joyz Hagan March 19, 2012 at 10:12 AM
You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college out of the area without a car, you may also qualify for a lower rate. search online for "Clearance Auto" they are the best for student drivers
Susan Smith March 19, 2012 at 12:53 PM
Do readers really understand the one sided information which is being published! There are BILLIONS of dollars in the MCCA fund which covers ALL motor vehicle injuries after they reach approx. $500,000. We, the people have paid OUR money into the MCCA. Ins. companies have supported Peter Lund (Speaker of the Hosue in Lansing, MI) to try to get a bill passed (HB4936) which would subject MI residents to a system with financial caps similar to Workers Comp. The legislators in favor of the bill wrote an appropriation into the bill, HB4936 which takes away the rights of MI residents to vote on the bill. Mr. Lund was a former employee of State Farm Ins. Attorneys who will benefit from large settlements are also backing this bill. People in MI MUST understand how corrupt and misleading ins. info. is. We have the BEST auto ins. in the Country! We get lifetime coverage for $175/year. The 21% raise in what we pay was instituted by the MCCA, which is owned by the ins. companies. The MCCA can arbitrarily raise the amount we pay and has stated that they do not have to show the people of MI where the money is or how much there is in the fund. PLEASE listen to what is really going on in this industry. YOUR life and care could be at stake. Google HB4936 or CPAN and become informed of what people are fighting to perserve. We will regret it if our NO-Fualt is lost to the greed of insurance companies.
Erica March 19, 2012 at 02:16 PM
I am perplexed by Mr. Dyer's misleading and misinformed statement, "We must also get reforms in our health care. Insurance companies usually pay twice as much if not more for health care. Some of these costs are mandated! Why should an insurance company be forced to pay twice as much for health care? These costs get passed on to you and I." According to law, all insurance companies MUST be billed the same rate for services by healthcare providers so the REAL issue here is why aren't auto insurance companies working with healthcare prociders to get better rates as BCBS and Medicare do? Also, currently this LIFETIME (not unlimited) benefit costs us $145/year-- the MCCA is artificially inflating their deficit numbers in order to pass on a large increase which will then hopefully force drivers to lead to the same unfortunate conclusion as Mr. Dyer and this reporter. I strongly urge all Michigan drivers to educate themselves on Michigan's auto no fault laws and HB 4936
Jim March 19, 2012 at 06:57 PM
Actually, There is such law that auto insurance companies be billed the same rate as any other health insurance company, or any other entity for that matter. It is truly an open book, and it is taken advantage of significantly, as much as 130 percent of standard charges (admitted by the healtcare industry, to make up for the low fee schedules of medicaid and private insurers. That, plus the fact that private and group health coverage is no longer the primary payer in auto accident injuries, has created a huge, unsustainable situation. The numbers don't lie.
Jim March 19, 2012 at 06:58 PM
Mistake in the first line of my prior comment: "There is NO such law"

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