The question “why does it cost so much to insure a car in Michigan?” has come up more recently in the last couple of years or so. While it’s tempting to look to the insurance companies for answers, the first place to look is our state government. The coverage provided on your auto policy is in accordance with our state laws. Our state periodically examines and approves each insurance company’s rates and calculations that determine what we pay for auto insurance. The state is very involved in the auto insurance system!
The auto laws and insurance policy we know today were created in the 1970’s. Our no-fault program received bi-partisan support in an era where social safety nets and consumer protection were gaining popularity. Other states also adopted a no-fault insurance program, but none went nearly as far as Michigan to protect their residents from the financial burdens created by physical injuries or lawsuits that can come from a serious auto accident.
The most controversial no-fault benefit is our state’s Personal Injury Protection (PIP) which for decades has paid billions in auto accident medical costs. PIP benefits are paid regardless of who was at fault, without long court battles, as long as there are auto accident medical costs being incurred. For life. There have been MANY auto accidents in Michigan that would have financially ruined families and lowered their quality of life if not for Unlimited PIP.
Michigan’s no-fault insurance program was one of the best pieces of legislation to pass in a time where we also had Watergate, OPEC, stagflation (which has nothing to do with deer hunting), and don’t forget disco and bell bottoms. If someone creates a “70’s Festival” you won’t see me there. But if someone creates a “No Fault Festival,” I’d attend, and since I might be the only person there, stop on by for a good conversation about insurance!
