Detroit, MI (PRWEB) July 10, 2012

Michigan regulators approved rate hike requests from major insurers who said they are increasing prices to accommodate rising per-vehicle fees that fund the state’s no-fault system, highlighting the passage of costs from insurers to consumers that occurs in the only state in the U.S. offering lifetime compensation for crash-related medical expenses regardless of fault, according to Online Auto Insurance.

Insurers pay into the Michigan Catastrophic Claims Association (MCCA), which charges a $175 per-vehicle fee to reimburse insurers for claims exceeding $500,000. A $30 fee increase went into effect on July 1; that fee has increased year-after-year from $104 in 2008.

Critics have argued that increasing MCCA costs make it hard to get cheap car insurance coverage in Michigan, as insurers who pay the ballooning per-vehicle fee typically shift their costs onto policyholders in the form of higher premiums.

Allstate, Fremont and 21st Century were all approved for rate hikes of varying degrees that kicked in on July 1, the same day that the higher MCCA fee went into effect.

Regulators approved 21st Century’s request to hike rates 3 percent overall. 

Fremont submitted its request to increase rates by 2.1 percent.

Allstate increased rates overall by 3 percent.

Industry experts and legislators have grappled with the cost of coverage in Michigan, which is one of the most-expensive states for coverage in the U.S.

American Insurance Association (AIA) president David Snydertestified before members of a state House committee last October, saying the coverage system faces a “death spiral” if reforms were not made.

Several pieces of legislation establishing new exclusionary provisions into no-fault laws were introduced this year, including one that prohibits illegal aliens from seeking no-fault benefits and another that does the same for drivers who crash their cars while intoxicated.

Those bills were approved by committee members in June and are currently awaiting further consideration in the state House.

For more on this and related issues, head to http://www.onlineautoinsurance.com/michigan/ for access to an easy-to-use quote-comparison generator and informative resource pages.

Read the full story at http://www.prweb.com/releases/2012/7/prweb9683956.htm