The no fault coverage for the motorists across the state is about to become more expensive.
The latest reports from Michigan have shown that the cost of auto insurance per vehicle will be increasing by 6 percent, to an average of $186 percent for coverage of injuries resulting from crashes.
The increases are expected to be put into place by July 1, said an industry board.
The announcement of the new higher fee was made by the Michigan Catastrophic Claims Association (MCCA). At the moment, the cost of the coverage is $175 per vehicle. The no-fault auto insurance law demands that insurers pay the annual assessment in order to provide coverage for personal injury protection (PIP).
The association provides auto insurance companies with a reimbursement for costs higher than $500,000.
This applies when more than that amount has been spent on treating individuals who have been seriously injured in a car accident. Insurance companies working in the state must pay the MCCA for the assessment under the regulations of Michigan law.
The PIP auto insurance coverage is mandatory for drivers in the state and is what makes sure that accident survivors will have an unlimited lifetime of medical benefits from the auto insurance coverage. The cost of providing those benefits has come back to the policyholders in the form of their premiums.
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Increases in auto insurance premiums are nothing new to drivers in the Michigan, who are already paying among the highest rates of any state in the country. Though it may only be $11 this time, this has been piled on top of a steady stream of other increases that have been experienced by motorists throughout the state over the last several years.
The reason for the increase is that the MCCA has predicted that there will be a larger number of accidents this year in which people will be seriously injured. Between that and the rising cost of health care services, the cost of providing the PIP coverage has risen and the auto insurance fee must be able to compensate for that.
According to Michigan records, the average no fault auto insurance claim has risen drastically over the last 12 years. It reached $44,000 in 2012. The next state with the highest claims was New Jersey, which had a much lower $17,000 per claim.