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Michigan Drivers Face Insurance Rate Hike

The Michigan Catastrophic Claims Association announces that motorists will see a $30 increase per vehicle.

Michigan motorists beware: The cost of driving won't just be going up this summer because of gas prices. The Michigan Catastrophic Claims Association on Friday announced that auto insurance, mandatory for every vehicle on the roadways, will increase by $30 for each policy on July 1.

The 21 percent increase — to $175 per vehicle — is the highest in the history of a state fund that covers claims for unlimited lifetime medical benefits under Michigan's no-fault auto insurance law, the Detroit Free Press reported today.

That fund is adjusted annually. Of the $175, $141.93 is to cover claims, $32.72 is to address a long-term deficit in the fund, and 35 cents is for administrative costs, according to the Free Press.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, told the Free Press that the cost of medical care for auto accident victims has risen 166 percent since 2002. Those costs are getting passed along to all drivers, he said, which "validates our calls for reform."

Patch reader Ron Dwyer, an insurance agent based in Waterford, agrees.

"As an insurance agent I can tell you Michigan's auto insurance rates are one of the highest in the nation," he wrote on the Bloomfield Patch Facebook Page. "No-fault law was to have kept our rates low, but with loop holes in the system and unlimited benefits our rates keep rising to astronomical levels. Legislators in Lansing are looking at plans that will put optional caps on coverage to help lower costs. To be paying $ 175 per vehicle to the Michigan Catastrophic Claims Association is ludicrous!"

But the reforms shouldn't be limited to insurance, he added.

"We must also get reforms in our health care. Insurance companies usually pay twice as much if not more for health care. Some of these costs are mandated! Why should an insurance company be forced to pay twice as much for health care? These costs get passed on to you and I," Dwyer wrote.

Legislators quoted by the Free Press indicate the increase is sure to add to the ongoing debate in Lansing about whether the MCCA needs more transparency and that the no-fault law needs changes.

lori serda March 18, 2012 at 03:15 AM
Sounds like more propaganda from the insurance companies. They want to remove the coverage we currently have by saying we should "have a choice" but neglect to mention that they've removed the choice for lifetime medical coverage. In order to protect our families we will have to purchase MORE insurance! What a scam!
francezberry March 18, 2012 at 05:53 AM
I just heard it on the radio that "Clearance Auto" offers auto car insurance for less than $1 a day for drivers, any one aware of this ? have anyone purchased insurance through them. I did search for them and found them online.
C March 18, 2012 at 03:01 PM
$365 per year? That is not a bargain. Keep checking. I did.
gramparsons73 March 19, 2012 at 02:36 AM
Pretty soon no one will be able to afford to drive. I guess that is what they want. Everything is going up and no one seems to care. Insurance companies are nothing but thieves with the law on their side. People need to wake up, and wake up fast or we will all be on the street. Then you can be hearded and arrested for vagrancy,trespassing, or whatever. Gas heading over $4.00 a gallon. Great idea raise the insurance. Is it even worth driving to work anymore. What happened to the growth and economic recovery?
David Gifford March 19, 2012 at 01:01 PM
Sounds like this will only push a public outcry for better mass transit. Maybe Rochester should include putting tracks back down the middle of Main Street again!
Deborah Canto March 19, 2012 at 07:18 PM
It's a business driven, not consumer driven state, folks. One of the Supreme Court justices used to be the president of AAA. There's a warm fuzzy for you. Since driving without a seat belt is against the law, maybe catastrophic claims should be limited to people who were wearing one? Contact your reps in Lansing and complain - loudly and long. Remember, they are supposed to represent us..not the insurance companies.
N Kortas March 19, 2012 at 11:18 PM
I can't pay for my own insurance and I get to pay for someone else's. Time to take this as a tax deduction!!!
Marty Rosalik March 20, 2012 at 12:18 AM
More math time folks. Unlimited medical benefits are the root cause of the increase by The Michigan Catastrophic Claims Association. Unlimited means infinity and infinite liability. $20 Million is not infinite. Neither is $10, or $6 million. Michigan law mandates infinite coverage. How can any company underwrite infinity? Two things need to change. Some limit, even $20 million but some limit. Next, the mandate. If $6, $10, 0r $20 milion won't fix me... PULL the plug! If I prove that I have my own private medical and long term coverage, let me opt out! I have written Representative McMillinn regarding this very issue. So far. Crickets... Could it be that ALEC already told him his opinion on this?
Lianne Mathie March 20, 2012 at 01:20 PM
Well, it didn't hit home for me until I got the mail yesterday and my insurance company is no longer writing policys for car insurance in Michigan. Nothing like being a good customer,paying my bills, no claims and this fine how do you do by the company.
Suzanne March 20, 2012 at 03:27 PM
Lianne, your insurance company isn't writing auto policies in Michigan because it is no longer profitable for them to do so in Michigan. It is no longer profitable because Michigan is the only state in the Union to have unlimited medical benefits mandated in their policies. Last time I checked, the next highest state for medical benefits had a cap of $250K. Some states had a cap at $25K. With health an medical expenses increasing at double digit increases every year for the last decade +, it has become ridiculous to fund unlimited medical benefits for a lifetime. I'm not a supporter of the insurance industry, but the fact of the matter is that they want to eliminate the unlimited lifetime medical benefits. It is the trial laywers who support and want to protect the status quo. People comment on this without researching what is going on, and more importantly why it is going on. It is ridiculous to think a business will continue to conduct business in an area where a profit can't be made. It's not much different than insurance companies who don't write homeowners policies in Florida, or the Gulf region because of so many hurricanes.
Lianne Mathie March 20, 2012 at 06:27 PM
Suzanne, you may have missed the part where I said I paid all my premiums and never had a claim.The insurance company made money from me that whole time. The fact of the matter is that it's really not the property insurance companies making money but the huge increases in medical costs that drive this. My step father worked for Aetna for over twenty years, I am very aware how insurance companies operate.Thankfully I can look at my face every day in the mirror.
Suzanne March 20, 2012 at 07:03 PM
It's not about whether the insurance company made money off your policy. They could have 1000 good drivers like you, who pay their premiums and never make a claim, but have one catestrophic medical claim (with unlimited lifetime medical benefits) and still lose money. Your initial post indicated that you were mad at the insurance company for dropping auto coverage in Michigan. I've tried to explain to you why it isn't profitable for them to conduct business in Michigan under the current Michigan automobile insurance laws. According to the article, it states that medical care has risen 166% in the last 10 years, or 16% PER YEAR. Couple that with unlimited lifetime medical coverage (which no other state even comes close to offering) spells out the problem. If you understand how insurance companies operate, then you'd understand that they don't sustain themselves by if they are profitable by indivual policies, but by the collective whole of all policyholders.
Lianne Mathie March 20, 2012 at 07:28 PM
I am sure that you work for the insurance industry.Mad, hardly, cynical yes, because I DO know how insurance companies operate.Profit is not a dirty word,greed is.
Suzanne March 20, 2012 at 08:46 PM
Unless you're a non profit company, EVERY business strives to make a profit. You are distracting from what the real discussion should be about. Let's stay on point. Just to be clear, every auto policy written in the State of Michigan, no matter what insurance company has $175 tacked onto it by the Michigan Catastrophic Claims Association. So, every six months you pay $175 that doesn't even go to the company that wrote the insurance policy. It goes to the Michigan Catastrophic Claim Association. We are the ONLY state in the country that has to do this. Auto policies are much cheaper in every other state because they DO NOT have unlimited lifetime benefits. That's where the real discussion needs to focus on. If Michiganders want the benefit, they will continue to pay for it. If not, our auto rates will become much cheaper. Let's have an educated and reasonable discussion about the real issue, versus empty rhetoric.
Lianne Mathie March 20, 2012 at 09:59 PM
Indeed, lets be clear.I am educated so no need for insults. I do not have lobbyist paid for to advocate my business in Lansing or Washington. I consider 30 million dollar salaries to be a bit on the obscene side.Health care CEO's make more, but that's another discussion. The very thought of customer service within the insurance industry is non existent.I have every right to complain if a company that I have done business with drops me after I have held up my end of the contract for many years. The recent blow up in the New York Times regarding the employee who vented about how much distain Goldman Sachs treats their customers with is emblematic of how insurance companies,banks, large business regard their customers. I will repeat,profit is not a dirty word,greed is. We could well do away with the lifetime medical benefits, but I know one thing, my premiums would never be reduced, not one bit because that would require the company to share the profits and unless I'm a stock holder, I would be naive to believe that will ever happen. When my step father, the one that worked for Aetna, has a insurance claim, he's smart enough to employ a lawyer because they will deny claims, because it's not profitable to pay them. I indeed know how this business works more then a little too well.
Sharon Awbrey March 30, 2012 at 03:19 PM
Okay, bottom line: Complaining to each other accomplishes absolutely nothing. What can we DO to at least attempt to make a change? I am new at trying to affect change, so I could use some guidance. I agree with Marty Rosalik. If we can prove we have full coverage individually, we should be allowed to opt out. Better yet, why should the auto insurance be the one to cover medical bills. I talked to my insurance agent and he said Michigan is the ONLY state in the entire U.S. that requires auto insurance to cover medical -- at least for an indefinite period.
Lianne Mathie May 02, 2013 at 10:41 PM
Sharon, I guess you just didn't get it. I know how insurance companies work. They need to open the books at the MCC. Those rates are set BY the insurance companies with no oversite from anyone. It's the fox guarding the hen house.
Sharon Awbrey May 03, 2013 at 01:43 AM
Lianne, maybe you should quit making assumptions and being rude. You know absolutely nothing about me or my knowledge (or the lack thereof) of insurance. I stand by what I say. Michigan is the only state in the entire US that forces people to have hospital coverage with their auto insurance. Policy can be and always is changed. At this point, I bow out of the conversation. Sounds like nerves are raw and barbs are flying. I want no part of a fight -- especially where people who know absolutely nothing about the other people are making assumptions. Y'all have fun.
Motown Voice May 03, 2013 at 10:50 AM
Anyone who makes the case that the poor, poor insurance companies need to protect themselves because they might just not make a profit ought to be laughed at, and then ignored. That's just common sense. Insurance companies are the very model of greed.
Lianne Mathie May 03, 2013 at 01:20 PM
Julie, you were trolling a 18 year old with very hateful assumptions about him. If you want to be the judge of all morality, so be it. I will pick God and Christ over you.If your argument mirrors that of know hate groups, it's no wonder. The only revelation is now your not trolling using the screen name Observer.
Motown Voice May 03, 2013 at 02:07 PM
Wow. Julie truly is an anti gay religious zealot. I wouldn't have even known that if she hadn't pointed it out herself. All you have to do is go back and read her carefully coded dog whistle comments. I'll be watchful for this name in the future.
john doe May 03, 2013 at 06:19 PM
JULIE AND LIANNE, sadly neither of you know anything about the insurance biz... ALL insurance companies operates as investment bankers as their primary source of revenue. The purpsoe fo insurance premiums is to maintain cash flow, which is then invested in high yield stocks, bonds and other investment istruments. The state and fed. govt mandate that these companies must keep a certain % of the premium payout on hand in cash to pay claims if needed, and the rest gets invested, to which the yields pay for the business to operate. It is not uncommon for insurance co.s to pay claims equal to what they take in from premiums in a given year. Premiums rise with 2 factors, a rise in claims and OR bad ROI returns on investment which can be from a slow economy or bad investments... thus the rates are rising due to the poor economy in this case
Lianne Mathie May 03, 2013 at 07:06 PM
John, IF you can read. My father worked for Aetna for 20 years. I know fully how the insurance companies operate.Here's the skinny and what it all comes down to. Insurance companies routinely deny claims because it's not profitable to pay them.If you have a very good lawyer, you can sue to inforce your policy, but that's if you have a good lawyer. Now, go down to Louisiana and get some info from the folks down there about how insurance companies operate.
Lianne Mathie May 03, 2013 at 07:09 PM
Julie, talk about insurance or get off this thread. Now your trolling me, which of course is better then you stalking a 18 year old kid. If you can't stay on point then don't comment.
john doe May 03, 2013 at 09:49 PM
Aetna is just a tiny piece of the global insurance market, low in diversity, profitability to pay claims is not part of the business, if your claim is legit it is addressed, however many times people tend to insure with multiple carriers for different things, which leaves gaps or overages in coverage, which then causes an issue when a claim arises. Further, fraud is abundant, thus claims must be investigated for such. If you are talking about Katrina victims, thats the same story, many never had a policy that would cover flooding, or no insurance at all, I routinly travel to NOLA, and while some areas are still destroyed, others have been rebuilt and flourished. the bottom line to my point was how insurance companies derive revenue is not what youd think
Lianne Mathie May 03, 2013 at 10:06 PM
I touched on just Katrina, but denial in coverage is broad across all insurance markets. Try getting a pricey test in the hospital and see if they give that a thumbs up.Once again, back to the lawyers to enforce that policy. Sure, there's lots of people that are underinsured. However, that's not the point I was originally making. I believe that we need a whole lot more transparency. Example. The House today passed the cap at 1 million. There is talk of refunding a total of 125.00 per motorist, because the MCCA will kick it back. However, the MCCA was collect 170 and change, so what's up with that 50? Poof? As for fraud, I have no argument with that, but why do honest people need to fight to enforce the policys?
Notyor Biznez May 07, 2013 at 11:48 AM
Fine, I'll pay your insurance rates but I'd like to see more vehicles impounded and towed away from people who don't pay what I pay for insurance because, honestly, I think I'm one of the people blacklisted and having to pay this while some people are in on the buddy system or other less than straight up means. It was always the impression I got that the older one got, without any accidents, one's premiums would go down. You're telling us nothing we we're told was true, so I am going to hold you to that down to the last micro-detail.
Notyor Biznez May 07, 2013 at 12:13 PM
Them people, asking so much of the other people via insurance and other paper work. Perhaps they are in over their heads, or just posing as if they are in over their heads? I don't really wan't to be a good humanitarian any longer and throw these people a lifeline, how can I get around helping as few people as possible without risk of imprisonment?
doug May 07, 2013 at 02:53 PM
Remember this number.....49... That the number of states that have limits on medical coverage related to auto accidents. How about another 49.. That was the number of states who offered movie incentives that were less than the 42% Michigan was offering. In this case "we're number #1" is not something to cheer about.
Teabilly Huntin' May 07, 2013 at 07:04 PM
Ron Dwyer. lol. Shill for McMillin and Insurance industry.

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