Michigan Drivers Face Insurance Rate Hike

Michigan motorists beware: The cost of driving won't just be going up this summer because of gas prices. The Michigan Catastrophic Claims Association on Friday announced that auto insurance, mandatory for every vehicle on the roadways, will increase by $30 for each policy on July 1.

The 21 percent increase — to $175 per vehicle — is the highest in the history of a state fund that covers claims for unlimited lifetime medical benefits under Michigan's no-fault auto insurance law, the Detroit Free Press reported.

That fund is adjusted annually. Of the $175, $141.93 is to cover claims, $32.72 is to address a long-term deficit in the fund, and 35 cents is for administrative costs, according to the Free Press.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, told the Free Press that the cost of medical care for auto accident victims has risen 166 percent since 2002. Those costs are getting passed along to all drivers, he said, which "validates our calls for reform."

Legislators quoted by the Free Press indicate the increase is sure to add to the ongoing debate in Lansing about whether the MCCA needs more transparency and that the no-fault law needs changes.