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“I just moved to Michigan and my car insurance rates have skyrocketed!”

July 27, 2016 by Steven M. Gursten

One frustrated new resident, a veteran, writes to Michigan Auto Law about the higher price on his new auto insurance bill


I recently received a reader blog comment from a very frustrated new Michigan resident, writing about how his auto insurance has spiked upon his move back to Michigan.

With the high cost of car insurance, particularly in cities like Detroit, the cost of auto No Fault insurance has been in the news for the last several years. This has led to several bills being introduced in the Michigan Legislature dealing with auto No Fault insurance reform and D-Insurance for Detroit residents. I’ve analyzed these No Fault bills and D-Insurance extensively on this auto law blog.

I thought today I would share my correspondence, as it touches on many of these issues that I write about so frequently and on the very future of auto No Fault in Michigan.

This reader is also a U.S. military veteran, and this has its own interesting insurance issues.

Q.  I just moved to Michigan just a few days ago from West Virginia. I used to live in Michigan prior to entering the military. I find it appalling how the car insurance rates have sky-rocketed. I was told that if I have Veterans Affairs for healthcare, that I’m exempt from penalties while having a job. Now it looks like I’m going to be penalized on my auto insurance because I don’t have medical insurance? Is that what I’m understanding?

A.  If you have government benefits for health insurance (i.e. Medicare, Medicaid, Tri-Care, VA, etc.), you really should have primary medical on your auto insurance.

Government health plans are payers of last resort and are not supposed to pay for auto accident-related medical treatment if you are injured. Therefore, your auto insurance must pay. If you set up your auto insurance to pay on coordinated/excess basis, they will end up paying primary when they realize that your only health insurance is one of the government plans. Then they will charge you a penalty deductible, because you should have paid for primary benefits through your auto No Fault insurance originally, which is more expensive.

I’m sorry you’re “welcomed” to our state by this hike in the price of your auto insurance. Michigan has some of the highest rates in the country, and finding ways to correct this, while keeping the best parts of our auto No Fault insurance system intact for people who are seriously injured in motor vehicle accidents is something I write about often both in this auto law blog and in the media. I’ve proposed several solutions to the problem so people like you are not hit hard like you have been by the high price of car insurance. Here’s my 14-step plan to lowering our sky high auto insurance costs in Michigan.

Related info:

How can we fix Detroit’s sky high car insurance rates?


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