Hartwig: Michigan must deal with lack of cap for no-fault auto insurance

posted by Lawrence Shipman

Recently, an expert on insurance noted that people in Michigan will continue to pay high premiums unless the state takes some action regarding no-fault insurance.

Dr. Robert Hartwig, president of the Insurance Information Institute, said recently that the things that influence insurance costs are similar to those seen in other states. However, the one difference the state does present is the fact that it has an "unlimited threshold" for insurance claims involving no-fault insurance.

"No other state in the country provides unlimited no-fault benefits, and for good reason - with unlimited benefits come unlimited costs," Hartwig said while testifying before the Michigan House Insurance Committee.

Since 1998, the average no-fault insurance claim has risen 250 percent to a mark of $31,883 in 2007. Added to the fact there are no caps is that the state does not have an insurance fraud bureau with which to investigate fraudulent claims.

No-fault auto insurance involves a person's policy provider paying for their medical expenses regardless of who ends up being held responsible for the accident.