Insurance 101

Understanding the Ups and Downs of Auto Insurance Premiums

What Can Cause Auto Insurance Premiums to Be Adjusted?

State mandated fees or statutory assessments can drive up your insurance premiums. In Michigan, the largest of these statutory assessments is the Michigan Catastrophic Claims Association (MCCA) that every insured driver is mandated to pay. Find out more about the MCCA.

Claims costs have a direct impact on your premium. Over the years, we have seen an increase in auto repair and medical costs. Patterns of catastrophic weather, specifically the increasing number of occurrences of wind, hail, snow and ice claims and the significant resulting damages, can lead to increased claim costs as well.

Your driving record can impact your premium. If you have been in an accident, especially if you were at fault, your auto insurance costs are likely to be higher than someone with several years of accident-free driving. The severity of the accident and the cost of damages may result in a rate surcharge for a period of time. This surcharge typically decreases gradually each year you go without another accident.

Depending on the type of infraction, tickets and violations may impact your insurance premium as well.

Discounts that you no longer qualify for may lead to a higher premium.

Changes in your household can also impact your premium. The type of vehicle you drive, the drivers that are using your vehicles, even where the vehicles are parked are all factors that have a bearing on the cost of your insurance premium.

What Is the Michigan Catastrophic Claims Association (MCCA)?

Michigan is considered to have the best medical coverage in the United States when it comes to automobile accidents. Our state is considered unique among no-fault states as we offer mandatory unlimited, lifetime medical care under the Personal Injury Protection (PIP) coverage of your auto insurance policy. The MCCA provides this protection. Every insured driver in Michigan is mandated to pay the MCCA fee. The per-vehicle assessment for these benefits changes on July 1 of each year. According to the MCCA, medical care costs continue to rise more rapidly than general inflation. Find out more about the MCCA and components that drove the state-mandated rate increase.

Beside the MCCA, Are There Other Statutory Assessments?

In Michigan, several organizations are mandated to assess insurance companies for their costs besides the MCCA. These costs are also reflected in your Statutory Assessment Fees. These organizations include:

The Michigan Assigned Claims Facility, which was created to provide no-fault medical benefit coverage for certain people injured in automobile accidents that would not have auto insurance. An example would be a person that has and lives in a household without a vehicle that is injured by a hit-and-run driver. Each Michigan insurance carrier is assessed (based on their market share) for the costs of these claims.

The Michigan Automobile Insurance Placement Facility, which provides auto insurance to those unable to obtain coverage in the regular market.

The Michigan Automobile Theft Prevention Authority (ATPA), which was established in 1986 by Michigan Legislature, through a combined effort of law enforcement, communities, and business, to reduce auto thefts in the state. It is funded through an annual assessment on each insured noncommercial passenger vehicle.

The Michigan P&C Guaranty Association, which was created by Michigan Legislature to protect the public against financial losses as a result of insurance company insolvencies, resulting in the inability of the insurance company to pay claims.

All coverages and discounts described are subject to change, availability, qualifications, and certain restrictions. Other terms, conditions, limitations, and exclusions may apply.