Above: Rebecca Barens, President of Willow Insurance Group, speaks to ABC 13 about the rate increases.
As a Michigan driver, you may have heard that insurance costs are set to increase due to higher assessment costs from the Michigan Catastrophic Claims Association (MCCA). Essentially, the MCCA charges a flat fee based on the personal injury protection (PIP) coverage you choose to have on your insurance policy. This fee goes into a fund that can be used to cover any catastrophic claims that exceed a certain threshold.
The amount you'll pay in new costs depends on the amount of PIP coverage you have. For those with unlimited benefits, the full MCCA assessment will rise from $86 per vehicle per year to $122 in this year's assessment. Those with lower or no benefits that were previously paying nothing will now pay $48.
According to the Michigan Department of Insurance and Financial Services Director Anita Fox, the $48 increase for policyholders is legally required because of a projected shortfall for the MCCA. The deficit is due to lower investment returns and higher claims costs resulting from a successful appeals court lawsuit that challenged the state's 2019 no-fault insurance reforms.
While the new assessments will take effect on July 1, it's unclear whether the extra $48 will continue after the next year. The appeals court decision that led to these higher costs is now on appeal in the Michigan Supreme Court.
If you're looking to save money in light of these increases, Fox suggests shopping around for other types of coverage and asking about any discounts you may be eligible for. It's also a good idea to compare rates between insurance companies to see if you can find a better deal.
As an independent insurance agency, Willow Insurance Group is uniquely positioned to help you navigate these changes and find the best coverage for your needs. We work with dozens of carriers, giving us access to a wide range of policies and pricing options. Our team of experts can help you shop around and compare rates to ensure that you're getting the most competitive pricing available. Don't hesitate to reach out to us for assistance with your insurance needs.
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