Smart Auto Insurance Blog

According to the Associated Press, Michigan auto insurance policy holders will soon have to pay more in fees as of July 1st. The Michigan Catastrophic Claims Association raised its fee, which covers seriously injured victims of car accidents, to $125 per vehicle. The charge is a $20 increase from last year.

Since Michigan is the only state that offers unlimited lifetime medical benefits through auto insurance for the seriously injured, the MCCA levies the fee to cover rising medical costs. The fee was actually reduced by $18 last year; however, that was due to investment gains that reversed themselves this year.

In the Insurance Journal, it was reported that Attorney General Martha Coakley is wary of a potential entrant into the Massachusetts auto insurance market. Occidental Fire and Casualty Insurance Company recently filed its proposed rates for high-risk drivers, and they are 10% more expensive than average high-risk policies in the state.

Occidental also wants to charge several surcharges and fees that are either illegal in Massachusetts or considered unfair, including:

• A 35% surcharge for those unable to verify their driving records, including recent immigrants from non-English speaking countries who can’t get their records in English. That’s on top of the higher premium for inexperienced drivers.
• Drivers filing glass claims have to pay Occidental two deductibles: a comprehensive deductible and a separate glass deductible
• A fee of $25 tacked onto each initial policy purchase
• Fees of $8 per installment

In addition, Occidental does not allow drivers to reinstate their auto insurance policies after being canceled for nonpayment, which is against Massachusetts law. (Buying a new policy after having one canceled results in more costly auto insurance premiums.) Coakley is especially concerned because Occidental is targeting inner-city communities, where residents tend to have fewer auto insurance options.