After Mich. Fee Increase, Approvals Come for Insurance Rate Hikes

Michigan regulators approved rate hikes for three insurers that went into effect at the beginning of July and are related to a higher fee those companies have to pay to support the state fund behind its no-fault insurance system.

Requests for Michigan auto insurance rate hikes from Allstate, Fremont and 21st Century were all approved and went into effect for both new and renewing customers on July 1, according to rate filings from state regulators.

In filing documents, all three insurance companies said the requests were related to an increase in the per-vehicle fee insurers are charged by the Michigan Catastrophic Claims Association (MCCA), which increased on July 1 by $30, from $145 to $175. Insurers are initially charged to fund the state entity but typically pass that cost onto policyholders as higher premiums.

Michigan is the only state in the U.S. to provide lifetime compensation for crash-related medical expenses. The MCCA pays for claims exceeding $500,000.

Allstate was approved for a 3 percent overall rate increase, which the insurer said stems from the MCCA fee increase. The insurer added that it is increasing the average MCCA charge it passes onto policyholders from $74.60 per semi-annual policy period to $90.20.

Fremont called its rate hike, submitted late last month, an “MCCA update charge.” The 2.1 percent rate increase overall will impact 24,605 policyholders. The insurer’s last rate revision was a 5.6 percent overall hike in April.

21st Century Approved for MCCA Hike, Waiting on Other Requests

State regulators approved one request to increase rates at 21st Century, but the insurer is awaiting a decision on three other requests to hike rates at three companies under its masthead.

A 3 percent overall rate increase was approved for 21st Century Centennial that went into effect July 1 for all of its policyholders. The hike was related to a revision to the MCCA fee, according to filing documents. The approved last rate hike was a 7.5 percent increase that went into effect in March.

The insurer’s three other requests were submitted on June 25 with effective dates of July 30 for new customers and Sept. 5 for renewing customers. They all have “assigned” status under the Michigan rate filing database, meaning they are currently being reviewed by state regulators.

21st Century Premier requested a 15 percent overall rate increase that would impact 85,300 policyholders.

21st Century Centennial also requested a 15 percent overall rate increase that would impact 14,340 policyholders.

21st Century Advantage requested a 4 percent overall rate increase that would impact 22,535 policyholders.

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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