Michigan Leads in Auto Insurance Costs

Auto insurance rates in Michigan are the highest in the nation.
It’s one more sad top spot for the state, and things are only going to get worse. Recall that in her state of the state address, Gov. Granholm asked that insurers freeze their rates. But it won’t happen; the Michigan Catastrophic Claims Association (MCCA), which is the bureaucracy that pays out medical claims for auto insurers, is going to raise rates effective July 1 by $20. Insurance in Michigan has gone up dramatically in the past 8 years, most drivers will notice.
Some lawmakers are making noise about reigning in the claims association, such as state Sen. Glenn Anderson, who seeks more transparency in the association’s conduct. Michigan in unique in that it is the sole state with bottomless medical coverage for those hurt in an auto accident. I know that when I lived in Texas and Florida, that coverage was an option that many did not use.
The association is a train wreck, with the decision making board composed of five members – all from insurance companies. They hail from the Auto Club Insurance Association, Auto-Owners Insurance Company, GMAC Insurance, Progressive Insurance Company and State Farm Mutual Automobile Insurance Company.
Is it hard to see why this is such a mess? When a lifetime claim comes in, who would they rather have pay it out, their company or a taxpayer?
Legislators mostly wave at the problem, even creating a Web site that feigns interest in lowering rates. But just to see how sincere they are, click on the link for "Michigan Legislature Begins Auto Insurance reform Hearings." It's a dead link. Problem solved.