Michigan’s average auto insurance premiums decreased in 2006, compared to 2005, a recent study released by the National Association of Insurance Commissioners (NAIC) shows. For the two-year period 2004-6, Michigan average premiums declined 6 percent.
Michigan drivers on average spent $1,067 in 2006 on auto insurance, according to the report that gathered data from the state’s insurance departments. In 2005, the average auto insurance premium in Michigan was $1,088.
“Michigan is fortunate to have a healthy auto insurance market where competition, safer cars and company fraud fighting efforts have resulted in lower costs for policyholders,” said Pete Kuhnmuench, executive director, Insurance Institute of Michigan.
Michigan premiums rank 12th in the nation, however, the benefits policyholders receive under the no-fault policy in Michigan far outpace benefits available in any other state. Michigan is the only state that mandates insurance companies provide unlimited, lifetime medical benefits to motorists injured in auto accidents. States with higher average premiums include: New Jersey ($1,285); Louisiana ($1,254); New York ($1,213) Florida ($1,152) and Massachusetts ($1,124).
“The overall rate decreases demonstrate that insurance companies are keeping costs as low as possible even though Michigan policyholders have the Cadillac of auto insurance policies,” said Kuhnmuench.
Michigan and across the country, auto premiums have leveled off after years of increasing. While competitive marketplaces, safer cars and aggressive fraud-fighting efforts have contributed to this trend, rising costs for medical care, vehicle repairs and lawsuits remain a problem, Kuhnmuench said.
For example, it now costs insurance companies an average of $29,392 for each personal injury protection claim, which includes medical expenses for those injured in auto accidents. This number compares to $9,216 just 10 years ago.
Insurance fraud also contributes to higher insurance premiums and all policyholders pay for it. Property/casualty insurance fraud costs Americans at least $30 billion a year, or nearly $200 to $300 for each family.
For a copy of the NAIC 2005/2006 Auto Insurance Report, visit: www.naic.org.
Source: Insurance Institute of Michigan
Topics Trends Auto Fraud Pricing Trends Michigan
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