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Michigan Works to Lower Car Insurance Rates

The state of Michigan is trying to help its residents by working towards lowering their car insurance premium rates. Michigan requires that every driver have a car before he or she can register a vehicle with the state, but given the economic climate, they want to make sure everyone can afford to operate their vehicle legally. One of the main complaints from drivers is that auto insurance premium rates are just too costly to maintain when they are looking for work. The Michigan Legislature has decided to step up and look for ways to lower the rates.

Michigan requires drivers to carry liability insurance in the form of bodily injury, property damage, property protection insurance. You will also need personal injury protection for medical costs and personal injury protection for work loss. Drivers in the state pay some of the highest prices in the nation for car insurance. The average auto insurance premium rate for Michigan drivers is $2,281 for 2009. That is well above the national average of just $1,780. Policyholders already saw a 25 percent increase from their 2008 to their 2009 auto insurance coverage. Detroit drivers pay more than any other driver in the country does for vehicle insurance with an average of $5,072 in premium rates.

Voters in Michigan are hoping that they can get the proposal to lower rates by 20 percent on the ballots as soon as 2010. First though, the state must gather over 300,000 signatures for the ballot proposal. Even while the petition makes its way around the state, you can go ahead and save on car insurance by shopping online and reviewing available discounts.

What Does Michigan Want to Do?

Lawmakers say that the proposal will do more than simply lower rates to make them more affordable. It will also protect consumers from unfair insurance practices and help promote healthy competition to give drivers better alternatives.

A private firm will carry out the petition procedure and has 180 days to collect all the necessary signatures. Those fighting for the legislation to go through, say it is unfair that Michigan drivers are having to pay higher than the national premium, especially right now as the state is losing jobs. They say the proposed 20 percent cut is overdue for drivers trying to make ends meet.

Insurance Companies Do Not Approve

While drivers struggling to make monthly payments seem to enjoy the idea of a cheaper bill, auto insurance providers are not so happy. They say that they will be limited and they themselves would be financially hurt by the proposed legislation. Insurers are asking that lawmakers consider other options, and claim they are willing to sit down and discuss other reform options.

By being controlled with what prices they can offer, they are limited to what coverage options a driver can choose, according to some insurance providers. However, that may not be the case. Lawmakers say that companies need to adjust to provide a fairer practice.

Insurance companies are worried that if placed on the ballot, the referendum for lower auto insurance would be hard to fight. Typically, a ballot item that is designed to save the consumer 20 percent off anything is hard to fight, but when drivers have been dealing with higher than national averages in premium rates, this one may be especially hard to defeat.

Save Even More with Discounts

Sure, the automatic 20 percent reduction is great, but you can save even more than that with discounts from auto insurance providers. By doing a quick search online, you can find out which discounts apply to you and how you can lower your auto insurance today and not have to wait around for legislation to pass.

Often times, drivers feel they have to skimp on the coverage so they just choose general liability. But general liability coverage will only cover you for the damages you are responsible for causing. This can leave you to pay costly repair and medical bills for the driver and passengers in the other vehicle, not to mention your own personal situation.

Collision, comprehensive and uninsured/underinsured motorist protection are all forms of additional coverage that most refer to as full coverage. While you may not need this amount of coverage, you could maybe use some variation of those policies. Coverage type does factor into the premium rate, but your personal history will also play a major role.

A premium rate for a driver is based on a variety of different criteria including age, gender, location, type of car driven, marital status, driving record and credit history just to name a few. Knowing how you rank with each factor will help you find the cheapest premium rate available.

Younger drivers typically pay higher premiums because they lack real life driving experience. That is why more auto insurance providers are offering discounts to senior citizens. Females may also receive a lower premium than their male counterparts; due to highway statistics that show male drivers are involved in more accidents than women drivers are. Having a solid credit history will also go a long way in finding a lower premium. Most car insurance shoppers do not realize just how important having a good credit score is for their policy premium rates.

Shopping around for insurance gives you the best options to find a lower rate on your car insurance. You can compare coverage options and rates with several companies all at the same time when you shop online. This allows you to save both time and money. It also lets you learn about discounts such as a good grades discount for teenagers and college students. Then there is a safety discount that you may receive because your car comes equipped with safety features.

Other discounts include keeping low mileage on your car, choosing an e-bill paperless option, and by combining policies with one company. Having low mileage on your car is receiving a lot of attention for car insurance policyholders. While Michigan is working to reduce the average rate for auto insurance, others are trying to implement pay-per-mile systems that will allow drivers to pay only for the miles they travel.

Using an e-bill service means that your insurance provider will save on postage and printing services for your statement. If you have more than one insurance policy, such as health, homeowner's or renters, then you could combine that with your auto insurance policy to save more. Insurance companies are often good about rewarding customers who shop with them for multiple policies.

Taking a defensive driving course or driver's education course will also help you improve your standing with an insurance company. The way to find a lower premium is by appearing to be a lower risk to the insurance company.

Typically, you want to start your search for car insurance about a month or two before your current car insurance policy expires, but why wait? Go ahead and save 20 percent today by starting your search for auto insurance. You do not have to stick with your current provider. See what other insurance companies are offering to get ahead of the game so if the referendum does pass, you will be saving even more.


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