Economist and Insurance Advocate Testify to Stop Factors that Increase Premium Rates


Insurance Information Institute President, Economist, and Insurance advocate Dr. Robert Hartwig, said that drivers in Michigan will keep on paying more expensive premium charges than most Americans do for auto policies until public policymakers deal with the fundamental costs causing this trend.

Dr. Hartwig testified that the factors contributing to costs influencing the price of auto policies in Michigan may be the same to those of other states in the US, but one very clear exception sets Michigan apart from the rest, and that is the unlimited vault for no-fault car insurance claims. Dr. Hartwig confidently presented that current attributes of the existing no-fault system is what drives Michigan’s car insurance costs to increase in both relative and absolute aspects.

Reports said that Hartwig presented his speech with members of the Michigan House Insurance committee as his audience. In his speech, Hartwig emphasized that no other state or locality in the US offers unlimited no-fault benefits, and that these unlimited benefits end up translating into unlimited costs.

According to reports, arguments were presented with much credibility and Hartwig’s presentation was backed up with facts, figures, and computations. Other points tackled included a staggering 250% increase of the average no-fault auto policy claims in Michigan, from $9,103 back in 1998 to $31,883 three years ago, back in 2007. Hartwig confidently blamed this increase to system operations that did not have a sound system of checks and balances.

In contrast to other states, Michigan does not have medical expenses schedules and treatment protocols or utilization plans and controls. More importantly, there is no State insurance fraud department that will investigate and take legal action against abuse and fraud in the insurance system.

Hartwig even described the state’s no-fault system as the largest blank check in the country’s healthcare system. According to him, Michigan’s unlimited no-fault vault has been exposing consumers to full vigor and rage of runaway medical care costs; but sadly, cost hikes are only reflected by steeper premiums paid by drivers, and the more money paid by car or vehicle drivers does not even translate to increased profits in the insurance industry.

Hartwig capped of his talk by pointing out that the lack of industry competition has nothing to do with factors that cause premium rate charges to go up year after year since there are now more than 100 insurance providers and firms operating in the state. According to Hartwig, a solution to the state’s auto insurance premiums problem requires focus on the real cost drivers and nothing else.