Just received my car insurance renewal notice.

[llmart]

When will these exorbitant price increases stop? There is absolutely no reason for it. I have lived in two other states and have never seen anything like this. As a reference, my little compact car is five years old, I drive less than 7000 miles per year, I'm retired and haven't had a ticket or accident in several decades. My annual premium just went up from last year $227.

If my daughter and grandchild didn't live here, I'd have retired somewhere else. This is ridiculous.

[msongs]

1. how does the company justify the increase ? nt

[llmart]

2. Haven't heard back from my agent yet.

He just said something like "all the other companies I checked with were even higher."

[CaptYossarian]

9. You're probably paying for the crappy drivers in your area.

In insurance terms, if the "territory" (based on county or zip code) you live in has had more "incidents" (accidents or other claims they paid out on), statistically, you're likely to cost the company more money. They hire actuaries to run the statistics so they know what to (over)charge even responsible drivers. This isn't your fault--it's the people around you.

Last year, my premium went down, while my dad's (18 miles away) went up. He lives in a community full of lunatic drivers though. Neither of us has had a ticket or accident/claim.

[llmart]

13. So true.

Just living in Michigan qualifies for "living in an area of crappy drivers". However, my son lives in Florida and their insurance rates aren't as high as Michigan. He and I always argue about who has the worst drivers. When he's visiting and sees all the people here who think it's a place with no speed limits, he always says, "OK. You win."

[KT2000]

3. my sister's insurance went up

and the agent said it ha to do with the number of credit cards she had. Her score is good but I think these companies are using ANY excuse to charge more.

[llmart]

7. Well, that would never be an excuse I would believe...

because I have one credit card and an excellent credit rating.

[KT2000]

10. not having "enough" cards

probably qualifies you for a rate increase. They will think of something.

[Sherman A1]

4. My understanding is that insurance needs to be changed every two years

Travelers jacked mine last year after changing to them the previous year and I didn't have time to look for anything else at that point. I have planned ahead this year and will start the process early to get the best deal I can.

[llmart]

8. That sounds like a smart move.

It's really too bad that people have to play these games with all their bills. It's like the game you have to play with the phone company or the internet provider.

[Sherman A1]

12. Indeed it is unfortunate

but also a reality and as you mentioned just like the phone/internet thing.

[sinkingfeeling]

5. Shop around. I found a company that charges 50% less than what I had.

[llmart]

6. Oh, I will be shopping around.

Very good friend of mine is a retired insurance agent and I just spoke with her. She said she shops around every year. She told me who she is with right now and how much less it was and I'll be going there tomorrow to see what they quote me.

I am so sick of these companies who gouge people just because they know a good number of them will just stay with one company because of the inconvenience of changing.

[TexasTowelie]

11. It is because Michigan has mandatory, unlimited PIP coverage as a no-fault state.

Last edited Wed Jul 10, 2019, 02:34 AM - Edit history (1)

I learned about that coverage about 15 years ago when I worked in the insurance industry and noticed that four claims had reserves of $10 million each (actually it was $9,999,999 since that was the maximum that our computer system could handle). While the claims may not be as serious as expected, the fact that medical payments might need to be paid for decades in the future means that insurers had to keep high reserve amounts which factors into ratemaking.

Despite the fact that you are a safe driver, as a licensed driver you are helping to maintain a policy program decided by the legislators--the insurance companies are only responding to the laws adopted by those legislators. While your rates are high, the "benefit to society" is that nobody in the state is left without necessary medical care supposedly.

There is debate on all of the issues, but it ultimately boils down to "be careful what you ask for, because you might get it."

[MichMan]

14. Lots of factors, but medical claims is the major one

In Michigan, auto insurance is the primary payer of all auto accident medical claims. Once a hospital figures out that it is a car accident, there are essentially no limits on what they can charge.

For example, something like an MRI that would cost $600 if regular health insurance was being billed, costs $1500 or more if they know it was from a car accident. Also lots of unscrupulous lawyers will solicit accident victims, and steer them to clinics they are associated with earning kickbacks from said clinic

Example : "Mr Smith, this is attorney Joe Blow and I understand you were involved in a car accident. How are you feeling?

Driver "It was just a fender bender, I'm OK."

Attorney" Are you sure your neck doesn't hurt? You deserve to be compensated for your pain and suffering. Let me make you an appointment to see a doctor just in case"

Driver "I guess so, Do you really think I might get some money?"

Medical Clinic "Mr Smith, You need a MRI. We will bill your insurance $2000. " (Attorney gets $500) Let us give you a ride home (bills insurance another $300 for transportation)

" MRI didnt show anything. , but these injuries can get worse later. Why dont you come back in a week for another MRI? (another $2000 and attorney gets another $500 and so on...) "

There is some legislation to set some rates for medical procedures that should reduce costs

[llmart]

15. I've bolded the part that irritates me the most. Love how they term it a "unique scheme".

#1 Michigan: Life-time unlimited benefits

This is the sixth year in a row Michigan has topped our list, and the state has never managed a finish lower than third since Insure.com started the ratings. This is primarily due to its unique insurance system.

The average annual premium in Michigan came in at $2,611. This is a huge leap from last year, a $372 jump to be exact. It also puts Michigan a whopping 79 percent above the national average of $1,457.

The major issue in Michigan is its insurance system. Michigan has a very unique no-fault car insurance scheme, which requires all drivers to carry Personal Injury Protection (PIP) coverage. PIP helps cover medical expenses that the policyholder, family members or even passengers that are injured in a car accident incur.

The difference between Michigan and other PIP states is the coverage limits. The majority of other states that use a PIP system put a reasonable limit on PIP coverage amounts. However, Michigan guarantees unlimited, lifetime medical benefits to auto accident victims, which dramatically increases an insurer’s risk, and your premium.