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Michigan Auto InsuranceI get asked all the time: “My car is one year older this year, so why did my car insurance not get any cheaper?”

 

The reality of the cost of car insurance these days is there are dozens, if not hundreds, of moving levers affecting the premium for each of us.  Yes, as a car gets older, in general the cost of the damage coverages (comprehensive and collision) does decrease.  But at the same time so many other elements are moving to push car insurance prices upward each year:

 

  • Medical costs – Michigan’s required Personal Injury Protection (PIP) covers the cost of medical services after a car accident.  With medical costs increasing each year 5-10% or sometimes more, that price inflation has to make its way into our car insurance costs, so expect that fairly large piece of your car insurance to increase each year similar to the cost of medical services.
  • Parts and labor inflation – Again the premium for coverages related to repairing damages to your vehicle hinges directly on the cost of buying parts and paying body shop labor.  As those costs rise, so do premiums that pay for those pieces.
  • Michigan MCCA – Every July 1, Michigan’s Catastrophic Claims Authority recalculates the assessment that is charged on every vehicle insured in the state.  The 2017 assessment bumped this up to about $170 per car per year.  MCCA pays for medical catastrophic injuries greater than about a half million dollars.  Again as those costs rise, so will this charge that we all pay.

While costs might keep moving upward, there are steps we can all take to help keep our premiums lower:

 

  • Driving record – The first key in keeping costs down is keeping a clean driving record.  Remember that not only tickets, but even accidents where no tickets are written and you are more than 50% at fault like a slide off in snow, will count against you.  A couple at-fault accidents in a 3 year period can make you a high-risk driver and really limit your insurance choices.
  • Credit score – Nearly every company now uses some form of credit scoring in their pricing.  And it’s become a significant piece of your premium, for many carriers ranging in discounts up to 50% or more.  Building solid credit will pay off in the long-term on your insurance premiums.
  • Discounts and bundling – Multi-policy home and auto discounts can be a big price help, as well as discounts for things like membership in groups, loyalty discounts, taking safe driver courses, or having good grades for young drivers.

The key to getting a competitive price on your auto insurance is partnering with your insurance agent to make sure you’re taking advantage of the discounts and programs available to you.  If you need help navigating auto insurance in Michigan, you can contact Hardt Insurance online or by phone at 269-637-1181.

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