The new hike in auto insurance premiums put michigan right on top


11As per the latest figures that have been released the annual auto insurance rates on the 2011 model vehicles have risen by $131.74.

According to the latest estimates the annual rates for a 40-year-old sample male is at $1,561 and the state of Vermont is the least at $995, whereas Michigan is the highest at $2,541 according to the Insure report through Motor Trend.  This shows that the automotive heartland of the United States is the most expensive state and if you have to insure a vehicle in Louisiana a single-year hike has been around $443 on an average.

The average for Louisiana is at $2,453 and Oklahoma is at $2,197 which makes it the third most expensive state to insure your vehicle.

The insurance site has come to this latest conclusion after collecting data from 2,400 different vehicles around 6 large carriers across 10 zip codes in each state.  As per the reports by insure the rates can vary dramatically from one state to another due to various factors that can range from the population, weather, court systems, to the type of vehicles that have been purchased.  The only common factor that is undeniable is the uninsured motorists and this seems to be causing a national hike in auto insurance rates.

For instance, Oklahoma is the third most expensive state when it comes to auto insurance.  It has been estimated that just one out of four drivers was uninsured as per the 2007 study.  The state of Michigan ranked ninth for the most number of uninsured drivers.

What makes Michigan so unique?

The $443 rate hike in the state of Michigan was not just due to the uninsured motorists but because of the fact that it is the only state to guarantee ‘unlimited personal injury protection’ payments to those that are injured in motor vehicle accidents.  This goes to show that the insurance companies could be stuck with bills of over $480,000 per claim.  A private non-profit organization has been created by the state law and is known as the Michigan Catastrophic Claims Association which would step up to cover costs that go over and above that mark.

What is the reason for the hike in numbers of uninsured motorists?

The answer is fairly simple – because they cannot afford auto insurance and it is due to economic reasons stated Marc Eagan, President Eagan Insurance Agency.

Economy is still recovering and unemployment is still hovering at 9% and this could push costs further in the coming times.