Insurance companies are required to reduce the premium for this coverage so that there will be an average reduction per vehicle based on the level of coverage chosen. In August , the state Department of Insurance and Financial Services said it approved six initial rate filings covering a quarter of the market.
People who stick with unlimited benefits and buy policies from those companies should see an average It covers claims made against an at-fault driver for serious injuries to others. Perhaps not enough car owners took action when the law went into effect in July. There could be many variables at play here. Resource: Best cheap car insurance in Michigan Data: Michigan is most expensive state to own car; what gives?
High insurance rates, of course. Published: March 17, am. The self-reported data from insurance carriers reveal a major shift in the leading cause of the ever-rising cost of auto insurance in Michigan: Premiums that were once dominated by the cost of repairing vehicles are now swamped by the growing cost of treating injured drivers and passengers.
Personal injury protection coverage — which motorists are legally required to purchase — went from one-fifth of all premium dollars collected from vehicle owners in to more than half by Collision coverage for fixing damaged cars and trucks declined by nearly 6 percent over a year period in industry premiums, a data analysis shows.
For Home-Owners Insurance Co. The tripling of costs per injured driver and passenger between and outpaced medical inflation for that period by nearly 90 percent, the data show.
The insurance companies want the money. Theis is sponsoring legislation backed by Duggan, a Democrat, and House Speaker Tom Leonard, a Republican, that would greatly curtail medical spending in auto insurance by allowing drivers to opt out of unlimited lifetime personal injury benefits in exchange for a lower-cost plan. A bipartisan coalition of legislators allied with hospitals, trial attorneys and the most catastrophically injured drivers have proposed less drastic cost-controls.
Michael Webber, R-Rochester Hills. Complicating efforts to find compromise in Lansing are divisions among the different businesses involved over putting into state law set payment rates for medical providers and mandated double-digit rollbacks in the premiums insurers can charge in a competitive market.
This report analyzed 14 years of auto insurance industry data and found a dramatic increase in medical expenses, even as the number of drivers and passengers injured decreased by about 10, annually between and Auto insurers are required to file their geography-based insurance rates with the state Department of Insurance and Financial Services. Individual companies do not have to publicly disclose their annual claims data, leaving the industry-wide reports as the only publicly available information about how much money insurers collect and spend on damaged vehicles and injured riders.
The industry data lag by three years as insurers adjust their losses based on collision claims and medical bills, an increasing number of which are settled in litigation that now accounts for two out of every five lawsuits filed in Michigan courts. The skyrocketing premiums collected by insurers and losses incurred for medical costs corresponds with a decade-long percent statewide increase in the number of lawsuits between drivers and their medical providers and auto insurance carriers.
The costly litigation can vary year to year, causing unexpected spikes in losses and subsequent rate increases by insurers. Agents make commissions. For the overall insurance industry in Michigan, private passenger auto insurance has become a perennial money loser, while other lines of property and liability insurance remain profitable. The industry as a whole reported an average loss of 2. Reform efforts have gotten derailed by powerful lobbies.
Michigan officials have proposed multiple reforms in recent years, but there are several powerful lobbies pulling in different directions. The Michigan Association for Justice, which represents trial attorneys, and the Coalition Protecting Auto No-Fault, which includes a number of medical organizations and patient-advocacy groups, also have been vocal about trying to keep unlimited no-fault coverage in place.
Reforms involve trade-offs. If it was, it would be solved already. Make getting rid of no-fault or making it optional. A series of bills introduced in the state House in February would scrap the no-fault system entirely. Such reforms could certainly lower premiums.
But they also would increase lawsuits, and policyholders who choose a tort system would not have access to many of the same benefits as no-fault customers -- especially if someone is involved in a serious accident where the at-fault driver is uninsured or underinsured. End mandated unlimited medical coverage for auto-accident victims.
Senators voted to approve the main auto no-fault bill, Senate Bill 1, with Senate Republicans and two Detroit Democrats supporting the legislation. If that bill becomes law, victims with medical costs exceeding their auto coverage would be covered by their health insurance, which is what happens in other states.
In other states, auto accident victims with catastrophic injuries often become dependent on Medicaid, and sometimes have to spend down their assets to qualify. Create a fee schedule for medical providers. Under this reform, medical reimbursement rates would be more in line with what Medicare or private insurers pay.
Better coordination between auto and health insurer policies. Currently, auto insurers can allow drivers to coordinate their auto and health insurance, using their health plan as the first payer. A big reason to encourage coordination of auto and health insurance: Since health insurers pay lower prices for medical services, it would lower medical costs overall for auto accidents.
The downside: Many policies already are coordinated, so the savings might be small. Also, lower reimbursement rates would put pressure on health-care providers. The state Senate bill would allow any driver to opt out of PIP if their health insurance covers auto accidents.
End use of other non-driver factors in pricing insurance. Currently, insurers can use non-driving factors to price insurance, including education, home ownership, occupation and credit scoring factors. Auto rates also can vary considerably by ZIP Code. Critics say this drives up insurance rates for some, especially in low-income communities such as Detroit.
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