Drivers in Michigan to see an average car insurance premiums increase of $30

Michigan Auto InsuranceThe Michigan Catastrophic Claims Association (MCCA) has just announced that there will be an increase of $30 per vehicle to the auto insurance rates paid by drivers in the state starting on July 1, 2012, as per the new rate for 2012-13.

This will raise the average premium by 21 percent, making it $175. Premiums undergo an annual adjustment in Michigan in order to cover the claims that are made under the state’s no-fault insurance law’s unlimited lifetime medical benefits. The results of the assessment are applied to each car insurance policy issued in the state and includes $32.72 that is designated for the long-term fund deficit, $141.93 to pay for claims, and $0.35 to cover the costs related to administration.

This fund provides coverage for claims that are larger than $500,000. According to MCCA data, last year, it made approximately $927 million in payouts.

The Coalition Protecting Auto No-Fault, a group that is opposed to this insurance industry backed proposal for setting no-fault coverage limits, has also issued a statement regarding the rate hike by the MCCA. It claimed that the increases have an “overtly political” design that is meant to create support for the changes it is making to the system.

The president of the coalition, John Cornack, stated that it is evident to his organization that the MCCA increase is being used by the insurance industry “to pressure lawmakers into accepting its legislation that would drastically change Michigan’s no-fault system. And in the end, it’s the consumers who suffer.”

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