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.

Stephen : Neveda : I keep on reading that the insurance auto insurance premiums are rising on account of frauds in most of our states like New Jersey, Wiscoinsin and now Michigan auto insurance debate on rates is going on. How do you know an car insurance fraud.

Response : A great question Stephen, let me give you an idea that comparing auto insurance for different states is also a good excericse if you are involved in this field or matter of interest, however the rates which would apply would be the rates of the state where you live. That being said the auto insurance frauds have very much in common in all states.

Insurance fraud costs all of us in the form of higher automobile insurance premiums.It is an offence under the federal Criminal Code for anyone, by deceit, falsehood, or other dishonest act, to defraud or to attempt to defraud an insurance company.

Common types of fraud or attempted auto insurance fraud may include:
1) exagratting the quantum of loss or the repairs of the car
2) lying about the way a loss occurred,
3) filing fraudulent automobile accident or damage claims,
4) including previously existing damage to a vehicle when submitting a claim,
5) withholding information about past accidents, traffic convictions, claims, policy cancellations or non-renewals, other insurance in force, and medical and disability history, and
6) receiving payments for treatments not received.
Most of the time it frauds ocurr when the professionals like the lawyer, doctors and even the mechanics or the appriasals at times cooperate with the clients for monetary benefits.

Auto insurance frauds cost millions of dollars and these cost are passed on the the customers in the form of auto insurance premium hikes. There are certain regulations and laws to prevent auto insurance frauds or any insurance fraud and these are :
If you are caught committing or attempting to commit insurance fraud if you :
• Your claim will be denied.
• Your insurance policy may be cancelled outright.
• You may pay higher premiums in the future.
• You may be denied insurance in the future.
• More importantly, the offence is punishable, on conviction, by a maximum of 10 years’ imprisonment for cases involving an amount over $5,000 or otherwise a maximum of 2 years’ imprisonment.

Thanks.
Kamlesh