Auto Insurance Costs Rise Again

Accident on M43 near Grand Ledge.
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LANSING (WILX)-- Would you be happy paying another $11 bucks for your car insurance?

On July 1st Michigan's no fault insurance went up 6%. Michigan drivers are now paying $186 per vehicle/per year, compared to the $175 they were paying last year. Michigan Catastrophic Claims Association is behind the increase, it estimates having a two-billion dollar deficit this year.

Michigan is the only state in the country that guarantees unlimited medical benefits for motorists injured in auto accidents. As medical costs rise, so does auto insurance.

Michigan's auto insurance is the eighth highest in the nation. According to Michigan drivers pay $1,010 dollars more per year than the national average ($1,510).

"It's not the highest but it's one of the highest, and it's becoming more and more unaffordable for our policy holders," said Lori Conarton with the Insurance Institute of Michigan.

The number of accidents in Michigan isn't to blame, the state's actually at a ten year low according to law enforcement. Conarton says increasing medical costs is what's driving up auto insurance.

"Because we have a lifetime of unlimited medical benefits those accidents and those injuries can become very expensive,"

But unlimited medical benefits might not be around for much longer. Currently there's legislation in the House that if passed it would create a one million dollar cap.

"With this bill in the first year alone there is a guaranteed $125 dollar per vehicle savings," said Caleb Buhs with the Michigan Insurance and Financial Services Dept.

The bill also establishes fraud authority, and puts cost control on medical costs.

"In some cases hospitals are charging four times higher for the same services performed for other injuries as they are for auto related injuries. If those costs would come down the million dollar cap would go further."

But according to MCCA hospitals only attribute to 9.6 percent of the claims. More than 50 percent is attributed to post-hospital costs like attendant care.

There are more than seven million licensed drivers in Michigan, 20 percent are driving without insurance according to statistics. It's likely to go up with the recent increases says Conarton.

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