Insurance prices have been going up for everyone at a higher-than-usual pace. This phenomenon is not specific to a single insurance company, nor to a specific type of client. Even if you have a good credit score and a great claims history, you could very likely see larger than normal price increases.
Several factors are driving this change. The price we pay for our insurance is based partly on what insurance companies have been paying for property damage, auto damage, personal injury and medical costs. In the last couple of years, these costs have increased considerably. Inflation, combined with lingering supply chain issues and labor challenges have become big factors in the increased costs that we’re all experiencing in our lives.
Another economic factor the insurance companies are facing has to do with reinsurance. Insurance companies buy insurance to protect themselves very much the same way we do. This keeps them from going broke if there’s a series of large claims in a short period of time, as in a large storm. Reinsurance costs are rising and most of these costs are factored into the future rates we pay.
A recent development will also contribute to price increases. This has to do with the Michigan Supreme Court releasing its “long awaited” decision on the retroactivity of the 2019 No-Fault law. The court has decided that the fee-schedule and attendant care limits do not apply to those that were injured prior to the law change. This will likely have more of an impact on the fees those of us with Unlimited Personal Injury Protection (PIP) pay to the Michigan Catastrophic Claims Association (MCCA).
This is a good time to evaluate your coverage to make sure you’re putting your money where it really needs to be. It might be time to price out higher deductibles or remove physical damage coverage from an older auto. Perhaps now is when you have a good conversation about Unlimited Personal Injury Protection (PIP) and find out what you could save by selecting a PIP limit and/or exploring coordinating your health plan with PIP.
Time for a good conversation with your insurance agent!