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Report: Michigan No Longer Most Expensive State for Auto Insurance Rates

Michigan Business Network
January 14, 2022 5:00 PM

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The Zebra’s annual State of Auto Insurance report demonstrates no-fault reforms are working

LANSING — Michigan no longer holds the No. 1 spot when it comes to the average cost of auto insurance premiums, according to The Zebra’s annual State of Auto Insurance report released Wednesday.

While premiums increased nationwide by 28%, Michigan drivers saw only a slight increase of 4% mainly due to changes in driving caused by the ongoing COVID pandemic, according to the report, and Louisiana now leads states in terms of highest cost. This comes after The Zebra noted last year that Michigan premiums declined nearly 20% since reforms to the state’s broken, outdated auto no-fault system took effect.

Referring to the 2019 auto insurance reform, Nicole Beck, head of communications at The Zebra was quoted in an MLive article saying, “Michigan is lagging behind, so I think that’s a good sign that that something is working over there.”

“Louisiana has surpassed Michigan as the state with the highest average insurance rates in the country, according to this new report from The Zebra,” said Erin McDonough, executive director of the Insurance Alliance of Michigan. “The revised medical fee schedule implemented last year as part of Michigan’s auto no-fault reform finally stopped the egregious overcharging by medical providers that occurred for decades. This plays an integral part to the savings Michigan drivers are seeing in reduced Michigan Catastrophic Claims Association fees, including the $400 per-vehicle refund this spring.”

Michigan drivers are saving more than $4 billion on their auto insurance premiums. The savings stem from Michigan Catastrophic Claims Association (MCCA) fee reductions in 2020 and 2021, which total well over $1 billion in savings, and a $400 per-vehicle refund this spring, which totals an estimated $3 billion. The combined $4 billion-plus in estimated savings doesn’t take into account savings drivers may see by choosing different levels of Personal Injury Protection (PIP).

“More than 7 million drivers across Michigan are benefitting from auto no-fault reforms, which is why lawmakers should stay the course and not change the law,” McDonough said. “Our member companies continue to work around the clock to ensure benefits are covered for their customers and would remind insured drivers to contact the Michigan Department of Insurance and Financial Services if they have any complaints. The department has fielded an incredibly small number of complaints from individuals worried about having quality care and to date, open complaints only total 14.”

More drivers are also buying car insurance for the first time ever, or for the first time in a while now that it’s more affordable. According to data compiled by IAM member companies, more than 155,000 drivers have purchased car insurance since reforms took effect on July 2, 2020. Over 66,000 of those drivers didn’t have car insurance for three years or more.

Reforms have also encouraged more companies to enter the Michigan market. To date, 37 new companies are planning to enter the market or have already done so, increasing competition and further lowering the cost of auto insurance.

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IAM is a government affairs and public information association that represents auto, home and business insurance companies and related organizations operating in Michigan. Learn more about IAM and its members on FacebookTwitter or at www.insurancealliancemichigan.org.

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Michigan Business Network is an online broadcasting company that provides knowledge, news, and insights into Michigan’s businesses, industries, and economy.