Smart Auto Insurance Blog

According to the article “Michigan Motorists Hit With $18 Insurance Hike” by Chris Christoff on freep.com, Michigan drivers will pay even more for their Michigan auto insurance starting July 1.  They will be paying about $143.09 more for each car they insure to pay for medicare costs of others hurt in traffic accidents.

This turns out to be about $18.20 more then they pay now for each car for the Michigan Catastrophic Claim Association (MCCA).  They are a Michigan group which covers car accident medical claims that exceed $480,000.  This new assessment is the largest they have bad since the MCCA was created back in 1978.

The MCCA, which is made up by insurance companies, increased the fee today to cover an estimated $2 billion deficit caused by the increased costs in health care and less income from their investments.  They paid out $811 million in 2009 for major injuries and they predict about 1200 more injured people will qualify for coverage in 2010.  Michigan is currently the only state that requires auto insurance companies to cover unlimited medical costs and the MCAA was developed to help pay for some of the exceptionally large claims.

The high Michigan auto insurance quotes in Detroit and other Michigan cities are driving residents out as more and more people cannot afford the high costs.  It’s also causing thousands of residents to commit fraud or drop their insurance altogether.  This is according to the article “Car insurance rate setting hits Detroiters unfairly” by Jeff Gerritt on freep.com. 

Detroit is the nation’s poorest big city yet residents pay the highest average auto insurance rates in the country.  About half of its motorists go without insurance because it’s so expensive.  Part of the reason for this problem is what’s called territorial ratings, which allow auto insurance companies to base their prices in part where people reside.  Regardless of a person’s driving record, if they live in Detroit they will pay more for auto insurance.  Insurers state the reason for doing so is because these areas have been deemed higher risk. 

Since many are unable to afford their auto insurance costs, schemes are on the rise.  Some drivers buy fake insurance certificates for as little as $50.  Some use false suburban addresses when purchasing their policy to obtain a lower quote.