Reports suggests auto insurance policies at Michigan are the costliest

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26Two of the recent studies conducted in the field of auto insurance in the United States have revealed that residents of Michigan are the ones who pay the highest to avail auto insurance coverage. While both did rank auto insurance in this state to be the priciest, one of the reports awarded Michigan the first place. The main reason for the high insurance rates in this state can be attributed to the compulsory unlimited coverage to cover personal injury costs in case of accidents.

Considering a hypothetical case, a man aged 40 years with a good driving record will have to pay over $2,500 for one year to avail auto insurance coverage.

An increase of 21%

The auto insurance rates in Michigan increased by over 21% as compared to the results of one of the surveys conducted last year. This has resulted in the Michigan overtaking Louisiana to claim the top spot of this list. The recent survey has revealed that the most affordable rates for car insurance can be found in the state of Vermont.

Amy Denise, the managing editor for one of the online portals for car insurance said that the rates were calculated based on the prices offered by six leading auto insurance providers in every state. These rates are further adjusted based on the vehicle type and geographical differences to arrive at the accurate cost.

What is surprising here is that according to National Association of Insurance Commissioners’ national study, Michigan does not occupy the first, but the eleventh spot in the list of states with high auto insurance premiums. Unlike in the case of the other survey, the national study conducted by the NAIC takes into consideration the number of policies sold in each state and calculates the average price. According to this data, the average cost of the policy in the state of Michigan was just $1,032 in 2008. This figure is significantly less as compared to the figures of the other two surveys.

Insurance Institute of Michigan’s executive director, Pete Kuhnmuench, said that there are efforts being made to make unlimited coverage of personal injuries optional instead of mandatory so residents in this state can breathe a sigh of relief. However, this seems to be a daunting task since there are other issues such as climate concerns, business issues and unemployment problems that the Governor is currently focusing on.