Amit : What are the new changes in Michigan auto insurance. Would it make any difference in online auto insurance quotes for this state when one tries to get low auto insurance rates?

Response : Just recently as on the 17th December 2009, The House passed a portion of a bill package focused which according to the insurance industry will have disastrous consequences on auto insurance costs and the stability of the insurance market, including a prohibition on credit-based insurance scoring.

Now let me explain this to you in more details. As per the bill, the insurance companies will not be permitted to have a credit based rating. This would be an advantage for the customer since now they can go for online auto insurance quotes without anything to worry about and get multiple quotes since their credit score is not at all affected. Now to be very honest it is a myth that your credit score is affected and please see my post on credit rating and online auto insurance.

The insurance companies are not happy with this since now they will not be able to use the credit based rating system. As per the insurance companies the credit based rating helped them in giving low auto insurance to the clients. Credit-based insurance scoring has been shown to benefit consumers because it allows them to secure lower insurance costs. In Michigan, credit-based insurance scoring is used only to provide discounts for insurance customers. Credit-based insurance scores are not used in Michigan to apply a surcharge or to determine whether a person can be insured by the company. And despite the economy, credit scores are staying stable.

Auto and homeowner insurers doing business in Michigan have formed a coalition, Protecting Michigan’s Future, to defeat this misguided, anti-consumer legislation; promote comprehensive, cost-saving reform solutions; provide information to policymakers for making sound public policy decisions; and set the record straight on insurance practices.

My own recommondation to you is to go for online auto insurance quotes, you will get low car insurance rates for sure and find what suits you best with the online quotes without having to worry about any privacy information since this is free and the insurance companies should abide to the privacy acts.

Eben Pagan (New York): My auto insurance policy is going to be renewed by the end of this month and I live in New York. Can you please tell me about No fault car insurance in New York?

Response: Eben, I know you will find this odd, but the best way to get the best auto insurance rates is to compare auto insurance quote online and am sure you get the best deals. Online auto insurance is competitive and they offer you the latest discounts and best rates since they know that there are already a couple of  insurers offering their rates on the same page.

Let me shate another news with you which you might have read regarding No fault car insurance in New York.

New York’s auto insurers saw their typical no-fault payment for the medical care of accident victims rise by 56 percent to $8,748 per claim in the second quarter of 2009. This represents a dramatic increase from late 2004, when the average no-fault payment stood at $5,615 per claim, according to an Insurance Information Institute (I.I.I.) analysis.

The insurance industry, the New York State Insurance Department’s (NYSID) Frauds Bureau, the National Insurance Crime Bureau and law enforcement agencies continue to investigate suspicious claims vigorously, according to Dr. Robert Hartwig, the I.I.I. president and an economist. Yet loopholes in the no-fault system make it particularly vulnerable to fraud and abuse by a “no-fault industry” of corrupt medical professionals, attorneys, and street-level criminals who work on their behalf.

“In less than five years, New York’s auto insurers have seen an extraordinary 56 percent increase in the average cost of no-fault claims, to a great extent the result of abuse and, sometimes, outright fraud in the system,”

“The costs of fraud and abuse of the state’s no-fault system ultimately are borne by New York’s honest policyholders. New York’s no-fault claim costs are now the second highest in the country and are 111 percent higher than the U.S. average of $4,152.”

The reason for letting you know all these details is to explain why the auto insurance rates are likely to rise. This is because the insurance companies base their auto insurance rates on their expenses and no fault claims expenses are a part of the expenses which all the insurance companies have to share and pay for.

The insurance companies offer a higher discount online since they save their operating cost. When you compare car insurance quote online make sure that you are also comparing your coverages and the discounts offered. I am sure you will find a good quote here.

Thanks.

Kamlesh