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Michigan Struggling As Car Insurance Premiums Are The Highest In The USA

Michigan is a no fault insurance state. Currently, there have been actions by politicians to try to reform the PIP or personal injury protection system that is in place to save drivers money on their car insurance premiums.
Most drivers in the state will spend more than eight percent of their household income on their car insurance payments. This shows that real changes need to be made soon.

The state is ranked number one in terms of the most expensive premiums for drivers. On average, drivers will pay more than $4,400 per year for car insurance which in today’s economy is a huge financial burden to bear.
In approximately one decade, the cost of car insurance premiums in the state has increased by more than thirty percent. Most politicians blame the fact that people have unlimited PIP benefits as the reason behind the sharp increase.
Every driver in the state is financially responsible for purchasing unlimited PIP coverage. This requirement can add a significant amount of money to the premium amount that drivers must pay.

Health care costs rise every year so this means that more and more benefits will be paid out so more money needs to be paid into the system to cover the losses.
Most states require that all drivers have $50,000 worth of PIP coverage so by Michigan having unlimited coverage requirements, it shows why they have the highest rates in the nation. Some drivers have expressed their distaste with the PIP system because they have stated that it is not sustainable because drivers are often going uninsured because they can no longer afford their monthly premium payments.
The unlimited PIP benefits are often used by those accident victims who have suffered severe injuries such as spinal cord and brain injuries. These people often require millions of dollars in medical care over the course of their lives. One idea is to cap the benefits at $250,000 to $1,000,000. This would help to reduce the financial strain that is on the PIP system and help to reduce car insurance premiums for all.

Drivers like having a “safety net” for themselves when they get seriously injured but they just do not want to shoulder the financial burden. Michigan could be one state where the no fault insurance law eventually can no longer work.
In no fault insurance states, each of the drivers have their car insurance companies’ pay for the claims no matter who is rule to be at fault. Most people believe that fault is not determined in these states but claims adjusters do actually make a determination of who was at fault and this can impact premium rates in the future. Hopefully, Michigan will see lower insurance rates soon but much needed reforms have been delayed thus far.