Lawmakers Attempt to Give Some Michiganders Lower Auto Insurance Costs

DETROIT, June 24, 2011 /PRNewswire/ -- In an attempt to expand Wayne County residents' low cost auto insurance options, a pair of lawmakers have submitted to the state senate a bill that would establish a pilot program through which lower-income, good drivers would have access to reduced rates and limited protection, according to Online Auto Insurance News.

Michigan has been home to some of the highest policy costs in the United States. The Insurance Information Institute reported that, last year, motorists in the city of Detroit were subject to the highest average premiums of any city in the nation. The least expensive city (Wapakoneta, Ohio), in contrast, had an average policy cost that was 85 percent lower than Detroit's.

A main reason Michigan's policy costs are so high is that state law mandates that personal injury protection (PIP), which covers a policyholder's medical costs, must be unlimited. As a result, every driver is a potentially huge exposure for a car insurer, and premiums on the whole are pushed up by their having to cover such large claims.

In order to reduce that exposure and provide affordable premiums through the proposed program, the medical coverage would be limited to either $50,000 or $100,000, which would in effect cut some of the risk associated with insuring Wayne County drivers.

Access to these lower rates, however, would not be extended to all motorists. Only those who are 21-years-old and older, have a household income that is at or below three times the federal poverty level, own cars worth $20,000 or less, and maintain relatively clean driving records would qualify. Eligible participants would also have to have been licensed for three consecutive years.

The legislation was introduced on Wednesday and has been referred to the insurance committee for deliberation.

Source: http://1.usa.gov/iUnObK

To read more about this and other car coverage issues, readers can go to http://www.onlineautoinsurance.com/low-cost/ where visitors will find informative resource pages and a quote-comparison generator that can assist consumers in efficiently comparing policy prices.

SOURCE Online Auto Insurance, LLC