Danielson Insurance Agency Inc, Auto Insurance, Car insurance, Home Insurance, House insurance, Motorcycle insurance, Motor home insurance, Classic car insurance, Boat insurance, Umbrella insurance, Obamacare, Obama care, Health insurance, Blue cross blue
Copyright © 2017, Danielson Insurance Agency, Inc.  All rights reserved. Website by North Country Website Design.
KINGSFORD 801 Pyle Drive Kingsford, MI 49802 Phone: 906-779-1900 Fax: 906-779-1930 Hours: M-F 7:30am-4:00pm
Danielson Insurance Agency Inc, Auto Insurance, Car insurance, Home Insurance
MENOMINEE 2719 10 Street Menominee, MI 49858 Phone: 906-864-9909 Fax: 906-864-9980 Hours: M-Th 9:00am-4:30pm; Friday 9:00am-12:00pm
Danielson Insurance Agency Inc
Whose Fault is No-Fault?

Exploring Why Michigan Insurance Costs So Much

August 6, 2017 by Chad Harrison Insurance agents hear some questions more often than others.  As an insurance agent in the state of Michigan the question that I hear most is, “Why does my car insurance cost so much?” or “Why did my car insurance go up when I didn’t have any accidents or claims?”  Well, sit down kids, it’s time for us to have a little chat about the insurance rates in our great state of Michigan. For the past 4 consecutive years Michigan has had the dubious honor of being #1 in a category that nobody wants to be #1 in, that’s right, #1 highest cost of auto insurance coming in 82% higher than the national average. (Check here for the breakdown). Do a quick Google search for “Auto Insurance in Michigan” and you won’t scroll long before finding a headline about No-Fault insurance.  Scroll through your newsfeed on Facebook and some local outlet has an article or poll about No-Fault insurance.  Tune in around election time and you will hear political hopefuls speak about what they would do to try to reform Michigan No-Fault (Here is a link on the views of our State Representative, Beau Lafave). So, we thought we would take a few minutes to dive into the question we hear every week…”Why does my car insurance cost so much”. A Crash Course in No-Fault Insurance: When No-Fault was first thought of in the early 1930’s medical costs were less, the number of cars on the road was a fraction of what it is today, and distractions such as cell phones weren’t even a thought.  What was growing, like my waistline after a Thanksgiving dinner, was the number of lawsuits stemming from car accidents.   At the time of No-Fault’s inception in the early 1970’s it was actually more affordable than the other liability policies available, not to mention the fact that it was faster and easier to get claims settled.  In No-Fault states if you are in an accident instead of going through the challenge of determining who was At-Fault and then going through that insurance company (not always a quick or pleasant proposition), each insured driver would make a claim with their own insurance company.  The biggest benefit of No-Fault is that the claim process is much faster and it eliminates the legal wrestling matches. Over time, a large number of the states that were using No-Fault have decided to make the switch back to the liability system, and there’s a big reason why they made the move.  That reason is probably the same reason many people make a switch from one insurance carrier to another, MONEY AND COST. As of this writing there are 12 states that choose No-Fault insurance as a requirement to get a license plate, registration, and legally drive on the road.  If you are a licensed driver and have an auto accident in Michigan, No-Fault insurance will pay for medical expenses without a limit, a percentage of wage loss benefits, damage you do to the property of others, and even a small daily amount for replacement services (think housekeeping, lawn work, etc.). That’s a whole lot of coverage with a whole lot of opportunity for payout by your insurance company, which leads us to… The Struggle is Real: Michigan is the only state in the union that offers UNLIMITED medical coverage for injuries resulting from an automobile accident.  Just for comparison, the state with the next highest limit of medical coverage is New York.  Would you like to take a guess on the amount that New York offers?  $50,000, that’s the limit, that’s it, no more, no higher, nada.  So, if you get injured in an auto accident in New York and the medical bills get huge, you’re on your own after $50,000.  If you get injured in Michigan and the bills get huge  your auto insurance company can be responsible to pay, and pay, and pay, and pay without a ceiling.  It’s important to know that this Personal Injury Protetction, or PIP, is reviewed on a claim by claim basis and can get quite complicated, as you might expect. Unfortunately, we live in a world where some people see this as an opportunity.  Fraud is one of the biggest issues and causes of high cost when it comes to No-Fault insurance, specifically in Michigan.  These claims are very difficult to flush out.  Add in an UNLIMITED amount of medical coverage and professionals that know how to work the system (just Google “ambulance-chasing lawyers”), it doesn’t take long to see how the cost for everyone spikes.  I talk to people every week that say, “I have never had a claim, why do my rates keep increasing?”  The truth of the matter is that we share the cost for those that abuse the system in the form of the rates that we pay for coverage.  The cost of Michigan No-Fault could be decreased by setting a limit to the amount of medical coverage, like every other No-Fault state.   This issue alone isn’t the only reason Michigan boasts the highest cost of insurance, another key issue is a nationwide problem. Distracted Driving We’ve seen the Public Service Announcements and videos (here ya go) that speak of the danger of distracted driving, yet year after year the number of accidents caused by distracted driving continues to grow.  As cell phones have become such a huge part of our lives, and in many ways enhance how we stay connected, they have caused huge issues on our roadways. Those little digital devices can be so tempting when we are cruising down the road.  Every ding of a notification causes me to drool like a dog in Pavlovian experiment.  I have to fight the urge (I even win sometimes) to check that phone or respond to a message.  I find that I must remind myself that I am operating a 4,000 pound missile that doesn’t allow time for distraction.  The reality is that the decision to drive distracted is completely unnecessary, dangerous to ourselves, our passengers and others, it’s against the law, expensive, and just plain dumb----Yet it happens all too often. The number of people that daily text/phone surf while driving is impossible to determine but, if the amount of people I pass every day is any indication, I am guessing the number is going up.  We don’t see the use of cell phones decreasing in our daily lives but it is our hope that the amount of distracted driving greatly diminishes.  Again, when it comes to insurance we all share the cost of our decisions and outcomes.  If some are careless and fraudulent the cost goes up for all of us. Conclusion: These aren’t the only reasons why Michigan is rocking the highest auto insurance rates in all the land, but it is a good place to start the conversation.  Insurance reform has been a hot topic for quite some time in our wonderful state and we don’t see that changing anytime soon. It’s our hope that you will take the time to learn about the pros and cons of the No-Fault system and then reach out to your State Representative with your wishes.   Blog author, Steve Gursten has a great article on some ideas on how to reform the system.  If you are looking for a place to start your research; you can check that out here: A 2017 NO-FAULT REFORM GUIDE FOR NEW LAWMAKERS. We hope this brings a little more clarity as to why you might be seeing rate increases at your next renewal.  If you have any questions please feel free to contact us and we will be more than happy to spend some time with you and answer any questions we can.
Copyright © 2017, Danielson Insurance Agency, Inc.  All rights reserved. Website by North CountryWebsite Design.
KINGSFORD 801 Pyle Drive Kingsford, MI 49802 Phone: 906-779-1900 Fax: 906-779-1930 Hours: M-F 7:30am-4:00pm Map & Directions
MENOMINEE 2719 10 Street Menominee, MI 49858 Phone: 906-864-9909 Fax: 906-864-9980 Hours: M-Th 9:00am-4:30pm; Friday 9:00am-12:00pm Map & Directions
Danielson Insurance Agency Inc, Auto Insurance, Car insurance, Home Insurance, House insurance, Motorcycle insurance
Whose Fault is No-Fault?

Exploring Why Michigan Insurance

Costs So Much

August 6, 2017 by Chad Harrison Insurance agents hear some questions more often than others.  As an insurance agent in the state of Michigan the question that I hear most is, “Why does my car insurance cost so much?” or “Why did my car insurance go up when I didn’t have any accidents or claims?”  Well, sit down kids, it’s time for us to have a little chat about the insurance rates in our great state of Michigan. For the past 4 consecutive years Michigan has had the dubious honor of being #1 in a category that nobody wants to be #1 in, that’s right, #1 highest cost of auto insurance coming in 82% higher than the national average. (Check here for the breakdown). Do a quick Google search for “Auto Insurance in Michigan” and you won’t scroll long before finding a headline about No-Fault insurance.  Scroll through your newsfeed on Facebook and some local outlet has an article or poll about No-Fault insurance.  Tune in around election time and you will hear political hopefuls speak about what they would do to try to reform Michigan No-Fault (Here is a link on the views of our State Representative, Beau Lafave). So, we thought we would take a few minutes to dive into the question we hear every week…”Why does my car insurance cost so much”. A Crash Course in No-Fault Insurance: When No-Fault was first thought of in the early 1930’s medical costs were less, the number of cars on the road was a fraction of what it is today, and distractions such as cell phones weren’t even a thought.  What was growing, like my waistline after a Thanksgiving dinner, was the number of lawsuits stemming from car accidents.   At the time of No- Fault’s inception in the early 1970’s it was actually more affordable than the other liability policies available, not to mention the fact that it was faster and easier to get claims settled.  In No-Fault states if you are in an accident instead of going through the challenge of determining who was At-Fault and then going through that insurance company (not always a quick or pleasant proposition), each insured driver would make a claim with their own insurance company.  The biggest benefit of No-Fault is that the claim process is much faster and it eliminates the legal wrestling matches. Over time, a large number of the states that were using No-Fault have decided to make the switch back to the liability system, and there’s a big reason why they made the move.  That reason is probably the same reason many people make a switch from one insurance carrier to another, MONEY AND COST. As of this writing there are 12 states that choose No- Fault insurance as a requirement to get a license plate, registration, and legally drive on the road.  If you are a licensed driver and have an auto accident in Michigan, No-Fault insurance will pay for medical expenses without a limit, a percentage of wage loss benefits, damage you do to the property of others, and even a small daily amount for replacement services (think housekeeping, lawn work, etc.). That’s a whole lot of coverage with a whole lot of opportunity for payout by your insurance company, which leads us to… The Struggle is Real: Michigan is the only state in the union that offers UNLIMITED medical coverage for injuries resulting from an automobile accident.  Just for comparison, the state with the next highest limit of medical coverage is New York.  Would you like to take a guess on the amount that New York offers?  $50,000, that’s the limit, that’s it, no more, no higher, nada.  So, if you get injured in an auto accident in New York and the medical bills get huge, you’re on your own after $50,000.  If you get injured in Michigan and the bills get huge  your auto insurance company can be responsible to pay, and pay, and pay, and pay without a ceiling.  It’s important to know that this Personal Injury Protetction, or PIP, is reviewed on a claim by claim basis and can get quite complicated, as you might expect. Unfortunately, we live in a world where some people see this as an opportunity.  Fraud is one of the biggest issues and causes of high cost when it comes to No- Fault insurance, specifically in Michigan.  These claims are very difficult to flush out.  Add in an UNLIMITED amount of medical coverage and professionals that know how to work the system (just Google “ambulance-chasing lawyers”), it doesn’t take long to see how the cost for everyone spikes.  I talk to people every week that say, “I have never had a claim, why do my rates keep increasing?”  The truth of the matter is that we share the cost for those that abuse the system in the form of the rates that we pay for coverage.  The cost of Michigan No-Fault could be decreased by setting a limit to the amount of medical coverage, like every other No-Fault state.   This issue alone isn’t the only reason Michigan boasts the highest cost of insurance, another key issue is a nationwide problem. Distracted Driving We’ve seen the Public Service Announcements and videos (here ya go) that speak of the danger of distracted driving, yet year after year the number of accidents caused by distracted driving continues to grow.  As cell phones have become such a huge part of our lives, and in many ways enhance how we stay connected, they have caused huge issues on our roadways. Those little digital devices can be so tempting when we are cruising down the road.  Every ding of a notification causes me to drool like a dog in Pavlovian experiment.  I have to fight the urge (I even win sometimes) to check that phone or respond to a message.  I find that I must remind myself that I am operating a 4,000 pound missile that doesn’t allow time for distraction.  The reality is that the decision to drive distracted is completely unnecessary, dangerous to ourselves, our passengers and others, it’s against the law, expensive, and just plain dumb----Yet it happens all too often. The number of people that daily text/phone surf while driving is impossible to determine but, if the amount of people I pass every day is any indication, I am guessing the number is going up.  We don’t see the use of cell phones decreasing in our daily lives but it is our hope that the amount of distracted driving greatly diminishes.  Again, when it comes to insurance we all share the cost of our decisions and outcomes.  If some are careless and fraudulent the cost goes up for all of us. Conclusion: These aren’t the only reasons why Michigan is rocking the highest auto insurance rates in all the land, but it is a good place to start the conversation.  Insurance reform has been a hot topic for quite some time in our wonderful state and we don’t see that changing anytime soon. It’s our hope that you will take the time to learn about the pros and cons of the No-Fault system and then reach out to your State Representative with your wishes.   Blog author, Steve Gursten has a great article on some ideas on how to reform the system.  If you are looking for a place to start your research; you can check that out here: A 2017 NO-FAULT REFORM GUIDE FOR NEW LAWMAKERS. We hope this brings a little more clarity as to why you might be seeing rate increases at your next renewal.  If you have any questions please feel free to contact us and we will be more than happy to spend some time with you and answer any questions we can.