Drivers pay more for auto accident catastrophic coverage beginning July 1

LANSING, July 1,2017: This date, Michigan drivers began paying more to cover the cost of medical care for those seriously injured in an auto accident. The increase^/ram $160 per vehicleto $170pervehicle, is part of Michigan's oneof-a-kind mandate that requires drivers to purchase unlimited, lifetime medical benefits with their auto insurance.

Michigan is the only state in the country that requires drivers to purchase unlimited, lifetime medical benefits.

"Michigan drivers are tired of opening their pocketbooks to pay more and more for a costly mandate that many can no longer afford," said Dyck Van Koevering, general counsel of the Insurance Alliance of Michigan (IAM). "It's time to roll up our sleeves and work with the Legislature to fix Michigan's broken, outdated ??-fault system."

The Michigan Catastrophic Claims Association (MCCA ) serves to reimburse auto insurance companies when medical costs exceed $550,000 (starting July 1). Each year, auto insurers are assessed a fee to ensure there are enough funds intheMCCA to cover thelifetime costs oftreating those injured in a catastrophic accident. Drivers then pay that assessment as part of their auto insurance premiums.

The MCCApays outmore than $ 1.1 billion per year for medical care stemm in g from auto accidents. During the past decade, medical care costs have risen 20 percent in Michigan, while inflation increased 11 percent. From 2006 to 2016, the average autoinsurance medical claim almost doubled from $26,989 in 2006 to $55,103 in 2016.

The increased medical costs have dri ven up the cost of auto insurance in Michigan to the third-highest in the country, according to the National Association of Insurance Commissioners. A recent poll conducted by IAM found that more than 70percent of Michigan voters believe it's time to reform Michigan's broken, outdated auto no-fault law.

When it comes to saving drivers money on their auto insurance premiums, there are three proposed changes to the no-fault system that will help reduce premiums:

* Create a fraud authority to crack down on fraud and scams, which costs the average Michigan family more than a hundred dollars each year in additional premiums.

* Enact a fee schedule to allow auto insurers to have a set rate for what hospitals can charge for procedures, just like in other types of insurance.

» Give consumers a choice of different levels of medical benefits, like a cell phone plan or cable subscription, so they can choose what works best for them - andmoreimportantly,what they can afford.