July Brings Changes to Auto Insurance Around U.S.

Monday brings a number of changes to auto insurance-related rules and rates across the U.S.:

Fee Rises for Michigan Motorists

The per-vehicle fee collected by the Michigan Catastrophic Claims Association (MCCA) will be increased on July 1. The fee, now $186, helps the MCCA fund the priciest no-fault claims.

The new fee, $11 higher than last year’s fee, was announced in March.

There is a one-of-a-kind auto coverage system in Michigan, where injured drivers can collect unlimited, lifetime medical benefits through personal injury protection (PIP) coverage, regardless of who caused the crash.

Because of its no-fault system, Michigan has a higher number of expensive claims that has also led to a steady increase in the MCCA fee; the fee was $104.58 in 2008-09.

The MCCA fee is paid by insurers but is ultimately passed onto drivers through their auto coverage premiums.

Electronic Proof Kicks In

Under several pieces of legislation that have been approved by lawmakers in recent months, drivers will be allowed to present electronic ID cards to authorities in traffic stops. “E-cards” are the electronic version of the traditional paper-copy card that driver typically carry in their glove compartment; those pieces of legislation allow drives to prove via their smartphone or mobile device that they have the appropriate auto coverage to be behind the wheel.

Electronic proof of insurance goes into effect on July 1 in several states, including Alaska, Wyoming and Florida.

E-Delivery Introduced in Some States

Also in Florida, a bill passed during the state’s latest legislative session goes into effect on July 1 that a national trade organization says is a step towards the insurance industry’s modernization.

HB 223 allows insurers to post policy information online for policyholders instead of hard-copy documents sent through the postal service. Policyholders can still get paper documents through mail if they request them, but letting insurers post information online makes business more conveniently accessible “at a few keystrokes,” according to G. Donovan Brown, state government relations counsel with the Property Casualty Insurers Association of America (PCI).

The bill also mitigates “the environmental impact of sending out untold thousands of sheets of paper,” Brown said in a statement.

A similar “e-delivery” bill in Idaho, called HB 232, also becomes effective on July 1.

Auto Club Rate Cut Goes into Effect

Beginning July 1, any policies purchased or renewed with Auto Club of Southern California will see rates representing an average 4.1 percent decrease.

Dave Jones, the state’s insurance commissioner, called the rate cut “significant” amid an economy that is “still recovering.”

“The Auto Club has again stepped-up and put their policyholders’ interests first,” he said in a statement. “They have a history of rate decreases and have set an example I hope other insurance companies will follow.”

The decrease totals $70 million and will impact more than 1 million motorists, according to state regulators, who publicized the rate cut in May.

Auto Club’s latest decrease is its fourth in nine years, according to the insurer.

An Auto Club spokesman told Online Auto Insurance News that the main reason for the drop was that fewer and smaller claims were filed with the company recently.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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