Auto insurance rates offered by the state’s top ten insurance companies dropped an average of 2 percent last year, according to the Insurance Institute of Michigan.
“Michigan has hundreds of insurance companies writing auto and homeowners insurance,” said Pete Kuhnmuench, executive director, Insurance Institute of Michigan. “The competitive market, along with safer cars and increased fraud-fighting efforts, resulted in lower costs for Michigan drivers.”
Auto insurance rates are expected to continue downward during 2007, with the average expenditure expected to drop .5 percent nationwide this year.
“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.
According to Kuhnmuench, Michigan is the only state that requires insurance companies to provide unlimited, lifetime medical benefits to motorists injured in auto accidents.
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, the Institute release said.
For example, it now costs insurance companies an average of $26,744 for each personal injury protection claim, which includes medical expenses for those injured in auto accidents. This compares to $18,535 just five years ago. The average collision claim has increased from $2,498 to $2,730 during the same period, Kuhnmuench said.
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.
Kuhnmuench urged consumers to take advantage of the competitive marketplace. “Michigan consumers have a wide array of options when buying an auto insurance policy and should shop around,” said Kuhnmuench.
Insurance Institute of Michigan is a government affairs and public information association that represents more than 90 property/casualty insurance companies and related organizations operating in Michigan.
Source: Insurance Institute of Michigan
Topics Auto Fraud Pricing Trends Michigan
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