Written by Tanya Terry
Michigan is the state with the highest average car insurance rates, according to MarketWatch.
There are a lot of causes contributing to Michigan’s higher than average rates for auto insurance, according to David Straughan, senior automotive researcher and writer.
“Car insurance rates are based on a whole lot of different risk factors, and the biggest thing for Michigan is the state’s insurance requirements.
“Part of that is the fact that Michigan is a no-fault state….
“On top of that Michigan has somewhat higher requirements than a lot of states, including that they have to have PIP coverage because of the no-fault rule. What’s unique about Michigan is Michigan drivers are required to have unlimited PIP coverage, which that guarantees basically lifetime medical benefits if someone is injured in an auto accident, and that’s not very common in the U.S.”
Straughan pointed out there are ways to opt out of that.
He added: “But in general people just have the pay the premiums for that.”
Additionally, one of the factors researchers have been studying in general with auto insurance rates is uninsured drivers.
“The number of uninsured drivers in the country in general is up. But Michigan has the second highest number of uninsured drivers in the country. It’s about a quarter of Michigan drivers that do not have auto insurance. That’s much higher than the national average.”
In order to compensate for that, that means insurers are often paying out more than they would if drivers were all insured. Straughan pointed out that drives up costs even further.
“The cost of car insurance is so high I think that a lot of people probably just can’t afford car insurance. I think that one thing that can happen is as car insurance rates go up, you have a lot more drivers having to make that decision, unfortunately. “
This can lead to a reciprocal effect, which makes things even more difficult for families that are budgeting and paying higher costs for other things as well.
Vermont, Maine and New Hampshire have the least expensive auto insurance rates. Straughan stated population density, crime rates and environmental factors/risk tend to play a role in auto insurance rates from state to state, in addition to state insurance requirements.
According to MarketWatch, Progressive Insurance costs the most ($2,030/year) on average.
It states USAA Insurance costs the least ($1,512/year) on average, which is available in all 50 states for veterans, military members and their families.
“I can say that advertising represents a costs to insurers. That cost, like any other cost, can be rolled up into their calculations and factored in.”
Straughan explained one of the reasons auto insurance rates across the country were going up was because of an increase in the cost of medical care, which represents additional costs for insurers.
Used car prices going up can affect auto insurance rates in the same way.
To combat high auto insurance rates, Straughan strongly suggests the following:
- Comparison shopping by getting multiple quotes
- Working on improving credit scores when needed
- Asking about available discounts
- Increasing your deductible if needed
- Eliminating add-ons, such as rental car reimbursements of roadside assistance when needed
Lastly, Straughan emphasized the importance of paying attention to elections to see who is saying what about how they want to regulate the insurance industry, or make changes to the insurance laws.
“Who is elected will have a big effect on how much insurance will cost in your state. It’s good for everyone to really listen to what these people are saying and factor it into your decision-making at the polls,” Staughan concluded.
To read reference article, visit https://www.marketwatch.com/guides/insurance-services/average-cost-of-car-insurance/
