Auto insurance premiums are higher in Michigan than in any other state
Michigan is home to the highest auto insurance rates in the United States, according to a new report from InsuranceQuotes.com. Insurance costs for drivers throughout the state are quite high and have been on the rise for some time. There may be a clear reason for this, as Michigan is the only state in the country that offers unlimited lifetime personal injury protection. The state is also home to one of the largest numbers of uninsured drivers in the country, whom benefit from no-fault insurance laws.
No-fault system may be leading to higher premiums
Michigan is one of the relatively few states that have a no-fault auto insurance system set up. The system is designed to ensure that all parties involved in a car accident receive the medical care that they need. While this has benefited many drivers, the no-fault system has also lead to an increase in auto insurance fraud. As fraud becomes more prevalent, insurers have to look for ways to recover from the financial losses that they see as a result of fraud. As such, insurers tend to raise premiums on the coverage that they offer.
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Lawmakers aim to address state’s insurance issues
Michigan lawmakers have been working to revise the state’s auto insurance rules, hoping to cut down on fraud and address the issues associated with expensive insurance coverage. In Detroit, Mayor Mike Duggan has promised to establish a new auto insurance pool, funded by the city. The insurance pool is meant to provide low-cost coverage to drivers that need insurance. Detroit has struggled to overcome financial issues in recent months and city officials believe that the high cost of auto insurance coverage is preventing people from moving to the city.
Auto insurance in no-fault states continues to become more expensive
Auto insurance costs are typically higher in states with a no-fault insurance system in place. This is largely because of the fraud issue. Insurance fraud tends to be much more common because of no-fault systems. Lawmakers in several states have worked to address the fraud issue without dismantling their no-fault system altogether, but little progress has been made thus far.