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Michigan Car Insurance Reform May Has a Huge Effect on Your Costs
The Michigan State Legislature passed a number of new car insurance reforms in January 2020 that increasing the level of premium payments and changed several PIP provisions, including the maximum payout. A new minimum level of coverage was created for bodily injury or property damage liability. Also, personal injury protection (PIP), which is a separate insurance policy, was created as a supplement to the personal injury protection policy.
The new Michigan automobile insurance reform law included three main components. First, it introduced a vehicle safety program. Second, it introduced a car insurance safety plan. Finally, it enacted legislation that creates a consumer protection commission. All three pieces of legislation addressed an important problem - Michigan drivers often pay too much for car insurance.
linkedin include a comprehensive system of traffic safety programs and safety plans. Included are traffic education programs, an automatic seat belt sign, safe driver discounts, and improved insurance rate comparisons. The new legislation also increases the penalties for traffic violations by requiring mandatory points on a driver's driving record and increasing penalties for vehicular homicide and drunken driving.
The second component of the auto safety system is a comprehensive set of defensive driving courses. These courses educate drivers on the best ways to safely navigate through traffic avoid collisions, avoid injuries, and stay out of the court system if ever pulled over by the police.
Finally, insurance cost creates a consumer protection agency, the Michigan Auto Insurance Information Center (MAIIC). This state agency has the authority to inspect insurance companies and brokers, investigate complaints, and publish recommendations for reducing claims costs. In addition, MAIIC will provide consumers with a variety of educational resources, including free tips on avoiding fraudulent car insurance companies.
Michigan's car insurance reform measures are designed to protect the majority of Michigan drivers. In particular, they are meant to reduce the costs borne by the insurance industry because of a high number of drivers filing unnecessary claims. According to the National Conference of State Legislatures, claims made in Michigan last year were up 12% from the year before. Although the claims ratio has increased, the number of claims made each year is still substantially lower than those made in other states.
For many consumers, the new Michigan car insurance reform may mean a reduction in insurance premiums. Because it has become more expensive to file claims, insurance companies have been forced to reduce their premiums to maintain adequate levels of insurance for all drivers. At the same time, they have decided to keep premiums at a reasonable level in order to retain their business.
Although Michigan auto insurance reform has helped lower the costs to insurers, it is not clear whether it has significantly reduced premiums. Because it takes at least four years for the savings to materialize, it is impossible to predict how much change the reform will bring to the cost of insurance. However, the new laws may result in a greater overall increase in insurance premiums, or a significant drop if rates continue to be under increased pressure.
Michigan car insurance reform may also cause many drivers to purchase a larger amount of car insurance coverage, which may be beneficial in certain cases. Unfortunately, this may push premiums higher than the cost of car insurance increases. Consumers who live in the more expensive parts of the state may end up paying more for their car insurance if rates are allowed to increase by the mandated amount.
As long as Michigan car insurance reform remains on the books, most people will be affected by its unintended consequences. Whether or not this particular law is helpful in saving drivers money or in causing them to pay more, it certainly is worth the short-term pain of some extra money for those who have had to contend with the high costs of automobile insurance in the past.
If you are a driver in need of car insurance in Michigan, contact a Michigan car insurance agent today and discuss your options. For example, there are a number of discounts available, including discount policies that provide discounts for good grades, student discounts, and even discounts based on health coverage. Additionally, most agents offer a large number of discounts that are offered to new customers, which can significantly reduce the cost of car insurance.
Michigan's auto insurance reform legislation does not affect your ability to receive quality car insurance, but it does create new opportunities to help you save money. For those drivers who currently have car insurance, however, you should continue to follow the advice in this article to help keep your premiums at affordable levels and stay safe while driving around your city or town.
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