This article was orginally published in the August/September 2018 Issue of the Barberi Law InsiderCar Insurance Rates

In Michigan, there is a lot of talk about the high cost of auto insurance. I don't know anybody that says, "I wish I could pay more for my auto insurance." That being said, there is an old idiom that applies, "You get what you pay for."

Our No-Fault Insurance coverage protects every Michigan citizen from injuries caused by motor vehicle accidents. Whether in a vehicle or a traveling pedestrian, irrespective of who was at fault in causing the accident. The most expensive component of an insurance premium is the coverage that protects an injured individual, known as his/her Personal Injury Protection Benefits (PIP). Such coverage covers 85% (tax-free) of a person's wage loss, up to a monthly maximum, $20 a day for replacement services to reimburse an individual for things that they can no longer do that they once did around the house, ie., mowing or raking the lawn, shoveling snow, doing laundry, etc., and for medical related expenses.

The biggest reason auto insurance premiums have risen is not the easy target that some want to make (too many frivolous lawsuits), but rather the increasingly high costs of medical care in hospitals and treating physicians. Those in the medical community do not need to apologize for those increasing costs, and they should be entitled to be reimbursed for the care that they provide to those injured in auto accidents. 

Insurance premiums are based on actuarial data. Which suggests, per premium dollar, the likelihood of an individual being involved in an auto accident, and if so, the cost of caring for such an individual. Wage loss and replacement services apply for the first three years after an auto accident. While reimbursement for medical expenses can last a lifetime, i.e., a brain-injured individual.

Michigan has the best coverage for an individual who is injured from an auto accident than any state in the nation.

For catastrophic injured individuals, we have a separate fund that all insurance companies are required to contribute to, to care for such an individual, rather than requiring the injured party to be kicked to the curb or become a Medicaid eligible recipient, i.e., possessing less than $2,000 of assets or otherwise be impoverished. Medical bills for severe injuries can often be hundreds of thousands of dollars, and an individual who has been severely injured is often blameless when it comes to how they became injured.

Do we want to tell such an individual or his/her family that auto insurance will cover the first $50,000 or $100,000, and the rest will be on you? Or do we want to say, as we currently do in Michigan, if you're injured as a result of a motor vehicle accident in Michigan, our No-Fault Auto Insurance Program will take care of you for life? Such protection comes with a price tag. That is why Michigan's auto insurance is a social program we all help pay for to protect us and our loved ones. And that is a good thing. 

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