Call Us 810-686-1470 ☰ ˟
Logo
Call Us 810-686-1470
  • Home
  • Get A Quote
    • Auto
    • Bonds
    • Business & CommercialImage of right arrow
      • Commercial Auto Insurance Quote
      • General Liability Quote Form
      • Business Owners (BOP) Quote Form
      • Builders Risk
      • Workers Compensation Quote
    • Farm
    • Flood
    • HomeownersImage of right arrow
      • Homeowners Insurance Quote
      • Manufactured Home Quote
      • Homeowner Flood Quote Form
      • Homeowners Insurance Quote Form
    • LifeImage of right arrow
      • Life Insurance Quote
      • Term Life Insurance Quote
    • Motorcycle
    • Recreational Vehicle
    • Renters
    • Watercraft
  • Customer Service
    • AutomobileImage of right arrow
      • Request ID Card for Auto Policy
      • Request Declaration and Coverages Page for Auto Policy
      • Send Declaration and Coverages Information to Lien Holder
      • Add Vehicle to Existing Auto Policy
      • Remove Vehicle from Existing Auto Policy
      • Add Driver to Existing Auto Policy
      • Remove Driver from Existing Auto Policy
    • Business & CommericalImage of right arrow
      • Request Declaration and Coverages Page for Commercial Auto Policy
      • Add Vehicle to Existing Commercial Auto Policy
      • Remove Vehicle from Existing Commercial Auto Policy
      • Add Driver to Existing Commercial Auto Policy
      • Remove Driver from Existing Commercial Auto Policy
      • Request General Liability Certificate of Insurance
    • HomeownersImage of right arrow
      • Request Declaration and Coverages for Existing Homeowners Insurance Coverage
      • Request Evidence of Insurance
    • Life
    • MotorcycleImage of right arrow
      • Request ID Card for Motorcycle Policy
      • Request Declaration and Coverages Page for Motorcycle Policy
      • Add Motorcycle to Existing Policy
      • Remove Motorcycle from Existing Policy
      • Add Driver to Existing Motorcycle Policy
      • Remove Driver from Existing Motorcycle Policy
    • Recreational VehicleImage of right arrow
      • Request ID Card for Recreational Vehicle Policy
      • Request Declaration and Coverages Page for Recreational Vehicle Policy
      • Add Recreational Vehicle to Existing Policy
      • Remove Recreational Vehicle from Existing Policy
      • Add Driver to Existing Recreational Vehicle Policy
      • Remove Driver from Existing Recreational Vehicle Policy
    • Renters
    • Watercraft & BoatImage of right arrow
      • Request ID Card for Watercraft Policy
      • Request Declaration and Coverages Page for Watercraft Policy
      • Add Watercraft to Existing Policy
      • Remove Watercraft from Existing Policy
      • Change Primary Operator on Existing Watercraft Policy
  • Blog
  • Companies and Payments
  • Resources
    • Refer a Friend
    • Important Links
    • Calculators
    • Important Documents
    • Free Reports
    • Insurance Glossary
    • Frequently Asked Questions
    • News Center
  • About Us
    • About Eaton Insurance Services
    • Location Map
    • Employee Directory
    • Customer Testimonials
    • Privacy Policy
  • Contact
    • Contact Us
    • Join our Newsletter
Home > Blog > Car Insurance Premiums & The Household Budget
THURSDAY, NOVEMBER 29, 2018

Car Insurance Premiums & The Household Budget

Thursday, April 7, 2016 
by Brad Eaton

 

We are often asked:

Why did my car insurance premium go up? I’ve had no claims!

With food prices skyrocketing, stagnant wages and more folks on fixed incomes, premium increases are a hardship for many. The issue of increasing premiums has several dynamics I will try to explain.

The No-fault Law – Michigan is unique with regards to automobile insurance due to our No-fault insurance law. Within this law, a primary cost factor is directly related to the unlimited (in time or amount) protection offered under the Personal Injury Protection coverage. The open end cost provision of this protection is the Cadillac standard for automobile insurance and is unsurpassed by any other state in America.

Medical Providers Abuses – A primary factor in rising cost of insurance premiums is that medical providers can charge whatever they want when treating auto accident victims. As an example, Blue Cross or Medicare might pay $825.00 for an MRI because they stipulate in their schedule of benefits the maximum amounts they will pay for a procedure and hospitals accept these fees. However, it is normal for them to charge Auto Insurers two or three times more than Blue Cross / Blue Shield would pay for the same procedure. The first question asked of any accident victim when admitted is; was your injury caused in trucking and motor vehicle collisions?

MCCA – A major factor linked to the PIP coverage is the Michigan Catastrophic Claims Association funding mechanism which was implemented in 1981 to prevent the mass exodus of insurance companies from Michigan. The MCCA fund, which is controlled by the State of Michigan, pays for any automobile accident injury that exceeds $500,000.00 (learn what does uninsured motorist coverage cover). The premiums for the MCCA fund rise proportionately to the higher cost of health and long term care and are exacerbated by the abuses previously mentioned.

Unpredictability- The unlimited costs related to the Personal Injury Protection (PIP) coverage is the best in the industry but the costs per claim is totally unpredictable. Any automobile accident could create a catastrophic event whereby millions of dollars would need to be set aside for just one severely injured person. Just as insurance companies need to purchase re-insurance for other catastrophic events, the State Legislature was forced to provide financial protection so companies would not go bankrupt under the financial pressure caused by the No-fault law, this is the MCCA fund.

Reform – For the last twenty years, insurance companies have been seeking additional reform for the provisions in the PIP coverage which would make pricing predictable and premiums more affordable for the consumer. To this point, attorney and medical lobbyists have been successful in stifling such reform. Until reform can be enacted, there is little that insurance companies can do to reduce automobile premiums in Michigan.

Agency Action – We, as an agency, do our best by rewriting our clients’ polices with another of our carriers when it benefits them to do so but this is only a temporary fix for an on-going problem that only No-fault insurance reform can fix.

Posted 12:56 AM

Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2012
  • 2011

  • michigan(18)
  • clio michigan(17)
  • auto insurance(17)
  • home insurance(14)
  • genesee county(9)
  • genesee county michigan(9)
  • insurance agent(7)
  • corona virus(5)
  • clio(4)
  • homeowners insurance(4)
  • michigan insurance(4)
  • car insurance(4)
  • insurance(4)
  • birch run michigan(4)
  • covid 19(3)
  • independent(3)
  • michigan auto insurance(3)
  • boat insurance(3)
  • renters insurance(3)
  • auto insurance reform(2)
  • house insurance(2)
  • frankenmuth michigan(2)
  • icy roads(2)
  • fenton(2)
  • farm insurance(2)
  • workers compensation(2)
  • bop(2)
  • texting(2)
  • christmas(2)
  • coverage(2)
  • safety(2)
  • quarantine(2)
  • grand blanc(2)
  • life insurance(2)
  • driving(2)
  • independent insurance agent(2)
  • business(2)
  • umbrella insurance(1)
  • snow covered roof(1)
  • claim prevention(1)
  • flint michigan(1)
  • personal umbrella(1)
  • holidays(1)
  • hartland(1)
  • prolife(1)
  • flu season(1)
  • march for life(1)
  • policy(1)
  • birch run(1)
  • otisville(1)

View Mobile Version
Carrier
Carrier
Carrier
Carrier
 
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Carrier
Home| Get A Quote| Customer Service| Blog| About Us| Contact
11436 N. Linden Rd. | Clio, MI 48420
Phone: 810-686-1470 | Fax: 810-686-8011
Email: info@eatoninsuranceservices.com
Social
Logo

Powered by Insurance Website Builder