Governor Whitmer changed the way auto insurance is practiced in the state of Michigan in an unprecedented way. Anyone purchasing an auto insurance policy after July 2020 will benefit from maintaining the best coverage options at a lower cost and enjoy unparalleled consumer protections. Guy Hurley McNeil has analyzed the changes and presents the following summary of the benefits.
1. The what that insurance companies set their rates has changed.
Insurance companies can no longer count applicants’ sex, marital status, and what zip code they reside in to set the insurance rates. Other non-driving factors that no longer apply are the applicant’s education, occupation, and credit score.
2. A new Fraud Investigation Unit was established to reduce insurance fraud.
Fraudulent insurance claims drive up the premiums for everyone. The Fraud Investigation Unit will work with law enforcement to deter anyone from submitting fraudulent claims, thereby reducing fraudulent claims burden on the system.
3. Consumer’s who lapsed their policies will not be penalized.
The new law prohibits insurers from charging reinstatement fees or increase premiums because the driver did not pay their insurance premium for a period of time. This amnesty needs to be redeemed by applying for insurance coverage before January 1, 2022.
4. Department of Insurance and Financial Services (DIFS) needs to approve insurer’s rates.
Before an insurance company sets new rates and policies that will be charged to the consumers, they need to obtain approval from DIFS.
5. Increased Fines and Penalties.
The reformed plan sets much higher fines for insurance companies and their agents if they violate the law in any way.
If you are about to purchase a new auto insurance policy, chat the Guy Hurley McNeil in Rochester Hills, MI, and let him help you choose the policy that regards all the above benefits and provides the most value to your unique circumstances.