A new study shows that Michigan has the highest car insurance rates in the entire country. A comprehensive study was done by CarInsuranceQuotes.com. The study compared states based on the percentage of the annual median household income that car insurance makes up. For example, if a person were to make $40k a year in a salary position, what percentage of this income is made up of costs related to car insurance. Most states range anywhere from 2%-$4.5%, but Michigan is by far the most expensive at a whopping 8%. Using the earlier example, the worker making $40k/year would end up paying roughly $3200/year for car insurance if living in Michigan and only pay $1000 based on the national average of 2.5% living elsewhere.
It’s obvious that something about our system is flawed and it’s costing the consumers which are the residents of Michigan. We are all overpaying for car insurance because of a system that is currently broken. The insurance environment is hard to judge in Michigan because these huge companies have no responsibility to share any financial information with anyone. If we knew the actual cost providing insurance we could then judge how efficient or inefficient the current no-fault system really is. Instead, they hide the truth and continue to increase costs and blame frivolous lawsuits and fraud as the primary reason. As a personal injury lawyer in our state, I can truthfully say that it is harder than ever to bring and win an auto accident claim. Obviously, there is something else that is making these costs climb year after year and as their highest paying customers in the U.S, we deserve an honest answer.
Want to know the real reason no-fault law is still in it’s current form in Michigan? It’s because the insurance companies that claim to be doing so poorly in our state aren’t doing poorly at all. In fact, Michigan is one of the most profitable states to operate for an insurance company. If the “car insurance economy” is doing so terribly, why are there so many insurance companies operating in Michigan right now? But they don’t want you to know this. Instead all you hear about is the price increase from the Michigan Catastrophic Claims Association, but what evidence have you seen that substantiates this price increase? These companies can charge whatever they want and you will never know if the cost is warranted or not.
I think all Michigan residents can agree on one thing. There needs to be major changes, and they need to happen soon. I just hope we don’t settle on keeping no fault and only making changes which actually help the insurance companies. It’s very easy to disguise non-favorable bills which don’t have the best interests of Michigan residents at heart, and we’ve been fooled many times before. We need to make smart decisions as these costs are getting out of control quickly. We either need our no-fault rates or drop or we need to drop no-fault law altogether. Either way, something needs to be done quickly.