Despite $1,350 average, Michigan car insurance premiums on rise again
Sarah Sell, WZZM 8:12 PM. EDT May 02, 2017
GRAND RAPIDS, MICH. - The WZZM 13 Watchdog team has been getting requests to investigate the high price of auto insurance here in Michigan
even Michigan House Speaker Tom Leonard called it one of the biggest issues facing the state.
We listened and began looking into the problem a few months ago.
Arlene Tilly is one of the many drivers who say they are frustrated.
She's been with the same insurance agency for two years, but this year, her premium doubled.
"I was paying $74 a month. Now it's $161?" Tilly said. "That's more than double. And it's the same insurance."
Tilly has one car and says nothing has changed on her driving record.
"The last two years, no tickets, no accidents, no nothing," Tilly said.
Citing customer privacy, Liberty Mutual wouldn't tell us why Tilly's auto insurance doubled.
But a media spokesman did tell us the premium hike is an industry trend that is national in scope.
In 2016, Liberty Mutual filed and received approval from the Michigan Department of Insurance
for an increase in auto insurance rates that went into effect this year.
The company cites more people on the roads
more crashes due to distracted driving, and it costs more to fix your car.
"And I ask them why the difference and they just said, 'The state of Michigan,'" Tilly said.
Michigan is one of 12 no fault law states.
It's also the only state that requires drivers to purchase lifetime medical benefits.
Michigan has the third highest premiums in the country: the average is $1,350.
Neighboring states like Ohio are $900.
In Michigan, you must buy insurance if you're going to drive a car. There are ways to lower your bill,
however: one is a good credit score. The other is a clean driving record.
Something else to consider is safety features on your car. If you have some, let your agent know.
Finally, bundle your insurance. If you have home and auto insurance,
use the same company and you could get a discount.
"I'm going to shop for new insurance because that's ridiculous," said Tilly,
who eventually did shop around. She found a new insurance company that is $50 cheaper a month.
Tilly's story is not unique. People across the state are feeling the pinch and they have different insurance companies.
It prompted the WZZM Watchdog team to investigate the "no-fault" law in Michigan,
which has been around since the early 1970s. Wednesday on WZZM news at 6 p.m.,
you'll hear from several sources on why they think the system needs to be reformed.
►Make it easy to keep up to date with more stories like this. Download the WZZM 13 app now.
Have a news tip? Email news@wzzm13.com, visit our Facebook page or Twitter.
Insuring your Wheels 101
In order to get the best possible rate, you'll need to understand the basics about how car insurance works.
Presented by
Presented by Car insurance is required by law across Canada for good reason. After all, if your ride is stolen,
damaged or crashed, the financial strain of covering the damage to vehicles
and passengers could very well bankrupt you and leave any victims unprotected.
But that doesn't mean you should pay more for car insurance than absolutely necessary.
In order to get the best possible rate, you'll need to understand the basics about how car insurance works.
What coverage is mandatory?
In order to legally drive a vehicle in Ontario, your auto insurance policy must include:
– Liability (protects against medical expenses and damage to other people's property if you're at fault in an accident)
– Uninsured Automobile (in case you're injured or killed in a hit-and-run or by someone driving an uninsured vehicle)
– Direct Compensation-Property Damage (so you can submit a claim if someone else caused damage to your vehicle)
– Accident Benefits (for medical care, rehabilitation and funeral expenses
and to provide income replacement if you're sidelined by an accident)
And what's optional?
The government doesn't insist you buy the following types of insurance, but if you still owe money on your vehicle,
some lenders require it. And many drivers decide it's worth the expense.
– Collision or Upset (covers damage caused by objects or vehicles, such as during a hit-and-run or
when you slide on black ice and hit a guard rail, or through your own fault)
– Comprehensive (pays for damage due to anything other than an accident; think theft, glass, vandalism or fire)
How does my insurer decide what I should pay?
Insurers take a number of factors into account when crunching your premiums.
Here's what they are and why they matter:
– The make and model of your vehicle. Premiums tend to be lower for models that are cheaper to repair;
have better safety and handling characteristics; or are statistically less likely to be involved in accidents or be stolen.
Insurers also factor in the cost of replacing your car, if necessary.
– Your driving patterns. Do you drive for work or commute long distances daily? If so, your premiums might be higher.
The logic: the more you drive, the higher the risk of an accident.
– Your driving record. For obvious reasons, insurers look at how long you've been driving,
whether you've had speeding tickets or convictions on driving infractions,
how many accidents you've had and the driving records of others who use your car.
– Where you live. As a general rule, car insurance premiums rise in and around large urban areas because there's a greater risk of accident,
theft or vandalism claims.
– How you're classified. Insurers establish categories for people with similar profiles.
Belonging to a group that is statistically less likely to drive recklessly or be at fault in an accident could lower your premiums.
Find the right insurance fit.
Under-insuring your ride could leave you holding the bag in case of an accident, damage or theft.
nd yet no one wants to pay more for insurance than absolutely necessary.
To determine what coverage you need, TD Insurance offers an easy Right Fit Tool.
Just answer five to 10 quick questions and get a personalized quote in minutes.
How can I lower my premiums?
That's the million-dollar question, but shaving your car insurance rates isn't rocket science. You can pay less by:
– Getting help. TD Insurance's Right Fit Tool will walk you through coverage options,
show you ways to save and provide you with a link so that you can get a quote.
– Bundling to save. Insure your home and car together and you'll reduce the cost.
– Finding out if you're eligible for discounts or preferred rates. If you belong to a professional association,
have graduated from certain Canadian universities or colleges or drive a hybrid or electric vehicle, you may be eligible for lower rates.
– Maintaining a pristine driving record. Providing you have six years of accident-free driving under your belt,
TD's Accident Forgiveness ensures your insurance rates won't go up, even after your first at-fault accident.
In Ontario and Quebec, TD Insurance also offers TD MyAdvantage.
Under this program, your good driving record can help you save up to 25 per cent on your renewal.
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