About Michigan Insurance Laws, Health Insurance and Regulations…The Michigan insurance industry is strong and provides service to the state’s multitude of business sectors, as well as to consumers. The industry and its various markets are regulated by the Michigan Insurance Department, which upholds and enforced state and federal regulations. Many of these regulations exist to ensure the cost of insurance does not spiral out of control, while other are established to ensure that insurance companies can act as businesses.
Auto insurance coverage is mandatory in Michigan. Consumers are required to insure the vehicles they operate and must adhere to stringent insurance regulations. The Michigan Insurance Department has established a minimum level of coverage consumers may maintain, which must account for: $20,000 bodily injury liability coverage per person; $40,000 bodily injury liability coverage per incident; $10,000 property damage liability coverage for accidents a driver causes outside of Michigan; and $1 million for property protection insurance for damage in Michigan.
Drivers are required to maintain personal injury protection (PIP) coverage in the state,
to which there is not limit. Michigan is a no-fault state, meaning that insurance companies must provide financial compensations to drivers in accidents even if they are at fault. Because of this, insurance can often be more expensive in Michigan than in other states. According to the Michigan Insurance Department, the average cost of auto insurance coverage in the state is $2,182.
Though economic turmoil has dealt a powerful blow against the real estate market, the Michigan’s property insurance industry remains strong and capable of providing service to consumers. As in other states, homeowners are not required by Michigan regulations to purchase or maintain homeowners insurance policies. Consumers are encouraged by the Michigan Insurance Department to purchase protection, however, due to the natural disasters that the state is often exposed to. Cold winters often create dangerous situations that could lead to property damage, thus highlighting the need for insurance protection.
Michigan must have a fully functional health insurance exchange in place by 2014, per the Affordable Care Act. The exchange system is meant to provide Michigan’s 9.8 million residents with access to affordable insurance policies. This may be a boon for the uninsured residents, who make up approximately 11% of the state’s overall population. The state is, however, having trouble establishing its own exchange system.
Insurance News Update: Governor Rick Snyder is a supporter of a state-run health insurance exchange, but legislators have been less enthusiastic about the system. Legislative inaction has lead to the possibility of a state-federal partnership, through which both the Michigan and federal governments will build and manage the exchange system. The Michigan Insurance Department notes that this will provide Michigan with limited control over an exchange program and may lead to a lack in service for some consumers.
Michigan Insurance Resources:
Michigan Insurance Commissioner: Patrick McPharlin
Michigan Department of Insurance Website: www.michigan.gov
Michigan Insurance Licensing Info:
File Insurance Complaint: http://www.michigan.gov/lara/0,4601,7-154-35299_10555_12902_12907—,00.html