Unlimited Auto Liability in Michigan and its...Afternmath
According to a recent Wall Street Journal article, the state of Michigan is one of the very few places that "requires car owners to buy no-fault insurance that carries unlimited medical liability." This is a huge issue. Unlimited Medial liability means that coverage is essentially endless, but so are costs.
Consider the following stats:
Average Auto insurance in All US States: About $1,500 dollars per year.
Michigan Average Auto insurance: About $6,000 dollars per year.
- That is about four times the cost. What a burden on both insurers and insureds.
When states have uber specific rules there is another hidden reason that costs spiral upwards. Not only does the required underwriting and payout cost money, but less insurers tend to write auto insurance in that specific state. This problem is probably more acute in low population or poorer states. States such as California, with the largest population, in the country, might be able to get away with it, but not states such as Mississippi.
When insurance regulator create their own unique rules in a given state, there are ramifications. And those ramifications can mean more law suits and higher yearly premiums.
"Detroit Mayor Mike Duggan has called the state’s current auto-insurance requirements “morally indefensible.” His lawsuit in federal court seeking to find the state’s 1973 no-fault auto-insurance law unconstitutional is pending."
I somewhat agree as a California insurance agent. I do like some regulations, but this one seems... out of sort and needing a change.
WSJ Article.
Consider the following stats:
Average Auto insurance in All US States: About $1,500 dollars per year.
Michigan Average Auto insurance: About $6,000 dollars per year.
- That is about four times the cost. What a burden on both insurers and insureds.
When states have uber specific rules there is another hidden reason that costs spiral upwards. Not only does the required underwriting and payout cost money, but less insurers tend to write auto insurance in that specific state. This problem is probably more acute in low population or poorer states. States such as California, with the largest population, in the country, might be able to get away with it, but not states such as Mississippi.
When insurance regulator create their own unique rules in a given state, there are ramifications. And those ramifications can mean more law suits and higher yearly premiums.
"Detroit Mayor Mike Duggan has called the state’s current auto-insurance requirements “morally indefensible.” His lawsuit in federal court seeking to find the state’s 1973 no-fault auto-insurance law unconstitutional is pending."
I somewhat agree as a California insurance agent. I do like some regulations, but this one seems... out of sort and needing a change.
WSJ Article.
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