OT: July 1 Updated Michigan Driver's Insurance Laws
For those of us who live in Michigan our legislature has passed insurance reform legislation that is supposed to drive down our nutty rates.
Do we have any insurance pros out there who can break this down and, perhaps, let us know if we need to look at our policies or make some changes to capture potential savings?
Side question: It seems like insurance companies are like cable companies in that they try to jack your rates up over time which seems to make shopping around every couple years a necessary evil. In my business good customers that pay their bills and are drama-free are cherished. Insurance companies tend to reward long lasting customers with higher rates than new customers....I don't get it.
Insurance is a game similar to the lottery. Most everyone loses, a few make good on the expenditure and a very very few get a big payday. The Call Sam ads virtually admit this. A few happy clients on their TV ads, like the lady, with an odd little smile on her face, that got a $1 million settlement for wrongful death of a child. Hit the lottery, baby! All that had to happen is a) your kid died and b) you hired Sam Bernstein.
All these Personal Injury lawyers actually do is negotiate a settlement with the insurance company. And the only reason they take the. case in the first place is there is enough insurance coverage to make it worth their while. It's a cynical game
Personal injury lawyers are the worst...
Kind of a perfect picture here. Even without photoshop, the McCloskeys are really the perfect American couple, they epitomize the late boomer/gen x white liberals who, when actually confronted with their privilege react with the real American slogan, Which, as Brian Cook once stated is “Fuck you, I got mine.” Trial lawyers who “fight for the little guy” while raking in millions on their suffering, but actually don’t want the system to change because the system makes them rich. With their petty bourgeois boating outfits, the guns and no shoes.
I'll take personal injury cases for clients on a referral basis and can say that in every instance it has resulted in more money being offered by the insurance company when a proper demand is made. Enough such that it covers the attorney fee percentage and then some so that the client receives more compensation. Not to mention the client gets additional assistance from my office to reduce liens and avoid subrogation when possible. For the few cases I've had to take to trial, the outcome resulted in significantly more than what the insurance company was offering.
I will say that unlike the TV lawyers who run their practices off volume and nuisance claims, that if I have a client with serious enough damages that I'm confident the insurance company will extend policy limits on a case where the insured has minimum policy limits, I don't take a fee.
Anyway, just a different perspective from someone who is villainized often.
I will say that unlike the TV lawyers who run their practices off volume and nuisance claims, that if I have a client with serious enough damages that I'm confident the insurance company will extend policy limits on a case where the insured has minimum policy limits, I don't take a fee.
I applaud you! That is the way good people operate.
I find it curious that as the car is worth less every year, the price to insure it increases.....
SCAM
The cost of insurance isn’t the car. It’s hospital stays and litigation
Former insurance guy here. Rates are supplied to and approved by your state’s insurance commissioner. Increases must be justified by claim/loss data. Rates in general go up because cost of claims (think health care and litigation) go up. When was the last time a hospital visit cost you less than the one before? To answer a specific question below, the value of a car is irrelevant. It costs the same (sometimes more) to fix and the aforementioned costs do not suddenly shrink because your car is old. It’s not a scam, it is math and common sense. But feel free to keep blaming the insurance companies if it makes you feel better.
so replacing a $45,000 car that is a total loss will cost the same as replacing the same model that is 4 years old and only worth half of that? that's strange math....
Two cars can be in an accident at the same time, and if they happen to be insured by the same company, then that company is paying for both.
As technology evolves, rates are going to be based on each individual's driving habits. I wouldn't be surprised if that happens in the next 10 years, as we have already seen telematics systems that people can use to save money on premium. I hope you don't like accelerating, braking hard, taking sharp turns or speeding because you'll really not like your insurance rates if that is the case... but hey at least you won't have to worry about other people's claims to directly affect your rates!
Allstate tried to get me to put one of those things in my car. I politely told them to fuck off.
Seriously! Was the insurance company taking premium from only one of those drivers?
Sure, that's total loss value. But repairing a 4 year old BMW that is damaged in a collision isn't half the cost of repairing a 1 year old BMW with the same damage.
It's not that simple. The cost of repairs might not vary greatly between the age of a vehicle, but the threshold for a totaled vehicle definitely does.
Sure someone could repair a 2008 civic in an accident for roughly the same price, as someone with a 2018 civic, but let's say these repairs are $8000. Well, for the 2008 civic, this exceeds the value, so maybe the owner gets $3k toward a new car. For the 2018 owner, it's not a total loss, so the $8k is paid.
Bottom line is total vehicle value is important and directly accounted for in insurance premiums.
Edit: I love how this is controversial for some reason. One of the most straight forward calculations in premiums.
Yeah, because insurance companies don't make any money off of us.
If people didn't make money, there wouldn't be any businesses at all, what is your point?
My post was in response to cassblue. To insinuate that the insurance companies are innocent bystanders is bullshit.
Double post
I’m 41 and have never made a claim in my life. Couple years ago Lib Mutual decided to increase my premium 40%. Yes 40% nothing changed, didn’t move, didn’t add coverage, no tickets—nothing. That’s a scam. Dumped those pukes that day.
I am an insurance professional, and one thing that I would warn people about prior to removing PIP or excluding themselves from it, is to make sure that your health insurance will pick up as primary on an auto claim. Otherwise, you may be in trouble if there is medical in your claim. More than anything else, I would make sure that you talk with your agent and really walk through all of that. From what I understand, because people can opt out of PIP now, if you hit someone else, you can be on the hook for their medical. I also do not recommend that anyone purchase insurance online unless you really know what you are doing.
For what it is worth, I worked with a client just this morning and the rates dropped by $1000 just by excluding themselves from the PIP, so if it is a good option for you, it can definitely save some money.
As a side note, one of the funniest things to me that people complain about is rates going up. Everything thing else in the world gets more expensive, but people freak out when insurance rates go up.
I assume that everyone here understands that they are putting their money into a pool of money that they can then pull from if they need to pay for a claim. And just because your car is losing value doesn't matter because whether or not you have a claim, your insurance company will need to use that pool to pay for someone else's 2020 F150 Platinum. Also, for those of you who live in an at-fault state, your insurance company doesn't know what type of car you may be liable for. While your car may be worth $8,000 you may hit a car worth $23,000.
Homeowners is easier to explain this with. Let's assume the average homeowners rate is $1,200, and your home burns down. Your rebuild value is $250,000 to replace, then the insurance company pays another $180,000 to replace your personal property, and they also pay for your living expense during the time your home is being rebuilt, lets call it $10,000. How many $1,200 policies are needed to break even on that one claim? About 360 policies.
That being said, I do encourage my clients to shop around just like I would recommend anyone do research prior to a large purchase. I am fortunate to work for an independent agency so I can do that on my clients behalf.
Comment and a question.
Completely agree on the perils of limiting PIP. As a surgeon, I can attest to the crushing, potential lifetime expense that an auto accident can create for an individual.
You advise against buying online unless “you really know what you are doing”.
Can you elaborate? I recently bought a policy from Progressive online for my son. I matched up the exact same deductible and coverage limits as the policy my agent offered and the online quote was 40% cheaper. My agent said “they can’t match online pricing”. Is the premium that an independent agent charges that much? Am I missing something in the fine print somewhere that makes this a risky move?
My experience with car insurance is that they lower my rates every year without me asking or having to shop around. This is generally because of no claims and cars getting older. We go with State Farm, which is probably not the cheapest but when we do need a claim it involves zero hassle.
I would stick with unlimited PIP regardless. In the case of a major accident that may require years of rehabilitation, therapy, living conditions changes, etc. it’s cheap peace of mind to have.
Amen. Michigan's rates are astonomical but not illogical. This is because unlike most (not sure about all) states, they are (used to be) tied to lifetime healthcare stemming from serious collisions.
My mom is one such victim and benefits greatly from the lifetime coverage, in terms of minimum cost or "free" physical therapy, clinic visits, advanced procedures, and more spinal surgeries than I can remember. I don't know if there's a limit on her healthcare stemming from that incident, but I am led to believe her coverage is lifelong and that she'll never brush up against a coverage limit (whether such a limit generally exists or not).
For reference, she is a AAA policy holder and her collision was in the early 2000s -- hit at approximately 50 MPH by a hit-and-run driver who was clearly unaware that she was the trailing vehicle in a funeral procession. Anyway I guarantee AAA is paying her more than she paid them. Perhaps it's at or exceeding a 1000-to-1 ratio.
michigan insurance is expensive because it provides for more things than any other state. the insurance companies were behind this change, but don't blame them too much, because so were guys like mayor duggan and our fav gov. the selling point was lowered rates which sound nice. the problem is two-fold: first, they only have to lower the rates for a couple of years and then the insurance companies are off the hook on that commitment. now they can't raise them unlimited amounts (see insurance folk's post above) but they can raise them and they will.
the second problem though is in my opinion is the bigger consideration. the catastrophic claims fund that we all paid into had (allegedly) about $10 billion in it. the insurers won't have to service that fund any more (mandatory assigned claims) and we rate payers won't have to pay into it...but the insurers get to split the money up. the real problem then is that catastrophically injured people will then be on the gov't medical 'insurance', meaning taxpayers will now have to pay for the long-term and severely injured care. the lowered limits of the other coverages can be blown through in a bad night in the ER.
recommend: keep your unlimited PIP. watch what happens. if in time you think its not worth it, so be it, but let it play out a little.
Insurance is also a very reactive industry. As the price of medical bills and vehicles increase, the rates increase to account for their exposure. I can remember when a new bumper on a car would cost about $500 if it was damaged. Now that minor repair will generally cost over $2000. As said above, the rates are regulated and need to be approved before the state will accept them.
I believe the medical fee schedule that starts in 2021 will help get the medical portion of you bill back in line as well.