Ive often wondered why Michigans auto insurance rates are so high. Its also puzzling to be asked by doctors offices and hospital personnel whether my condition that necessitated treatment was associated with an auto accident. I never realized the two experiences were related. Now I have the answer. It comes in a piece of research done by the Citizens Research Council of Michigan. Here is the key passage. I bet it knocks your socks off! Since 1973, Michigan drivers have been required to purchase personal injury protection insurance, which pays for unlimited medical costs for drivers injured in an auto accident, regardless of fault. The intent of this insurance system was to reduce the number of disputes, fraudulent claims, and litigation associated with auto accidents compared to a tort-based insurance system. While successful in meeting some important policy goals, no-fault insurance premiums and associated medical costs have proven to be more expensive than the associated costs in all other types of auto insurance systems. Accounting for both higher prices and higher usage, medical claims in Michigan cost auto insurers 57 percent more than claims for similar crashes in other states; consequently, automobile insurance premiums are 17 percent higher on average. Many groups have dived into this topic but CRCs paper was the first to look at the medical costs associated with no-fault auto insurance in Michigan in such depth. The research uncovered that medical spending related to auto accidents is higher than for other types of medical spending because: 1) auto insurers pay higher prices for medical services than general health insurance providers; 2) auto accident victims use more medical services following auto accidents than victims in other states; and 3) state statute requires that auto insurers reimburse the injured for medical expenses for lifetime medical expenses associated with the injury, with no dollar limit.
Posted on: Mon, 11 Aug 2014 21:03:28 +0000
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