Car Insurance Rates on the Rise

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For the second time in two years, Michigan auto owners are bearing the brunt and seeing an increase in their car insurance payments. This time it's 27-percent, and it's going to the state's medical care fund for drivers seriously injured in car accidents.

Doug Cruce, Executive Director of the Insurance Institute of Michigan, says when you have a system where medical coverage is unlimited and health care is on the rise, then you can expect increases. In the seventies, the state created the Michigan Catastrophic Claims Association or the MCCA. Since then, in the case of a catastrophic injury, the victim's insurance company pays the first $325,000. The state's fund picks up the rest.

Lansing resident Ruth Borger says it's comforting to know that such a system exists and she doesn't have a problem being part of it. Jim Konrad, Okemos resident, says he won't be happy to pay extra for his car insurance, but fortunately it's not a huge amount of money.

This increase comes after the MCCA refunded motorists back in 1998. Each auto owner in Michigan was cut a check for $180 after the association reported a $2 billion surplus. Some of the money collected with the recent increase will go to help build the fund back up.