Auto insurance set to rise in Michigan

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auto insurance MichiganAuto insurance fee set for 6% increase on July 1

The Michigan Catastrophic Claims Association, a non-profit, state-backed organization that helps support the auto industry, has announced that drivers can expect to pay more for their auto insurance coverage beginning this year. According to the organization, the annual fee that is associated with auto insurance policies will rise by 6% on July 1 of this year. This fee is levied on policies to help cover the costs of personal injury and the state’ no-fault auto insurance rules.

Fee designed to help insurers manage no-fault law

According to state law, insurance companies are required to offer personal injury protection (PIP) benefits. These insurers are required to cover the medical costs associated with car accidents, no matter who is at fault. The Michigan Catastrophic Claims Association has reimbursed insurers more than $500,000 for the benefits they provide due to the state’s no-fault rules, but insurers note that these rules lead to losses in most cases, thus driving up the overall cost of auto insurance coverage.

Annual fee attracts opposition

Increasing the fee associated with auto insurance coverage is expected to help generate more capital for insurers, giving them a better ability to manage the medical costs associated with severe care accidents. The fee will be $186 beginning July 1, a 6% increase over what it has been in the past. The fee is collected annually, but some consumer advocacy groups still consider it to be an inappropriate financial strain on consumers who are required to carry auto insurance policies.

Advocacy group files lawsuit against state organization

The Coalition Protecting Auto No-Fault, a consumer advocacy group, has filed a lawsuit against the Michigan Catastrophic Claims Association over the auto insurance fee. The advocacy group is seeking detailed information concerning the justification for raising the fee. if adequate information cannot be provided, the organization is likely to seek the repeal of the 6% increase on the fee.

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