Auto insurance coverage is expected to become less expensive in Michigan due to new measure
Changes being made to Michigan’s auto insurance laws could mean lower premiums for consumers and lower costs for insurers. The state’s House Insurance Committee has approved a measure that would make changes to existing insurance legislation, which could bring down premiums by $100 every year for the next two years. The measure would also prevent health care providers from overcharging insurers when they treat victims of auto accidents. Health insurers will also not be able to overarch auto insurance companies in order to recover from claims associated with accidents.
No-fault insurance laws place insurers and consumers under financial pressure
Michigan is currently the only state that has a requirement for unlimited medical benefits for those that are injured in car accidents. This is part of the state’s no-fault auto insurance laws, which are designed to ensure that those involved in crashes receive the medical care they need without having to worry about their insurance claims being denied. Other states have similar no-fault systems, but these states do not require unlimited medical benefits.
Lawmakers seek to improve the state’s insurance laws
No-fault systems are often criticized for promoting auto insurance fraud. This fraud can have a costly impact on the market, placing insurers and consumers alike under a great deal of financial pressure. In order to recover from the losses caused by fraudulent claims, insurers typically raise premiums. In order to combat the growing cost of auto insurance coverage, Michigan lawmakers have been taking steps to address the issues that have come to light regarding the state’s no-fault insurance system.
Insurance legislation has yet to be approved by the state’s Senate
The measure approved by the Michigan House Insurance Committee means that auto insurance premiums would be not able to be increased for the next two years. The measure also requires that insurers reduce premiums by $100 on any policy that is issued or renewed after June 30, 2016. The measure is not yet law, as it has yet to win the approval of the Senate.
