The state has returned to the top spot for having coverage more costly than any other in the country.
Michigan has now retaken its title as having the most expensive auto insurance rates in the United States, after having lost that top spot for a while due to the initial impact of the change in certain regulations.
The average driver in the state pays about $196 per month for coverage.
This represents about three times the national average auto insurance rates. While the state is home to much of the manufacturing of vehicles, many people would assume that it would be cheaper to drive them, but this is far from the case.
Though residents of the state did have a bit of relief from the high rates they had been paying last year when they received a $400 refund from their insurance companies due to the surplus in the Michigan Catastrophic Claims Association of $5 billion, that boon is to be short-lived.
The MCAA 2023-2024 Insurance Company Assessment has now been forced to raise premiums once again due to the cost associated with lifetime health benefits for beneficiaries still covered by regulations implemented before 2019. This means that drivers will be paying somewhere from $48 to $122 per vehicle. This is a rise of $36 over the 2022 MCAA fee.
The state remains on the hook for auto insurance medical claims filed before 2019.
The new fees were established for the purpose of addressing an estimated deficit of $3.7 billion in the fund that is used by insurance companies to reimburse customers after they cover over $600,000 on any given claim’s medical costs. It was also required to pay out the $400 refunds last year based on its temporary surplus.
MCAA officials are blaming the recent decision made by the Michigan Court of Appeals for the deficit, on top of the investment returns that were lower than anticipated. Furthermore, as a result of the case of Andary v. USAA Casualty Insurance Co., which ruled that the state’s No-Fault Act 2019 changes couldn’t be applied retroactively, medical expenses before that time must continue to be covered regardless of the new law. Auto insurance companies – and the state – remain on the hook for those expenses, which continue to rise in cost.
Insurance FAQ’s About Michigan Auto Insurance
Q: Is Michigan a no-fault insurance state?
A: Yes, Michigan is a no-fault state for car insurance. This means that regardless of who is at fault in an accident, a driver’s own insurance will cover their injury-related costs.
Q: What does it mean to be a no-fault insurance state?
A: In a no-fault insurance state like Michigan, drivers are required to have personal injury protection (PIP) insurance. This type of insurance covers their own injuries and damages in a car crash, regardless of who is at fault.
Q: What is the purpose of the no-fault law in Michigan?
A: The purpose of the no-fault law in Michigan is to ensure that every owner of a car in the state has certain basic coverages to pay for potential injury-related costs from car accidents, irrespective of who caused the accident.
Q: How does the no-fault law affect car insurance claims in Michigan?
A: Under Michigan’s no-fault laws, your own car insurance will cover your injury-related costs whether or not you were at fault in the accident. This affects how claims are handled, as your own insurance company will be responsible for paying out your claim rather than the other party’s insurer.
