You are here:HomeNews CenterInsurance News2009Michigan Governor Calls for One-Year Auto Rate Freeze

Michigan Governor Calls for One-Year Auto Rate Freeze

Michigan Gov. Jennifer Granholm has called for a 12-month freeze in auto insurance rates, citing a new report that industry experts dismiss as incomplete and...
February 10, 2009

Michigan Gov. Jennifer Granholm has called for a 12-month freeze in auto insurance rates, citing a new report that industry experts dismiss as incomplete and misleading. The report was prepared by Michigan Insurance Consumer Advocate Butch Hollowell. The report says auto rates in Michigan have increased 69 percent since 1989, while the rate of increase for auto accidents is down 54 percent over the past ten years in the state. The report makes a series of recommendations including setting a definition for premium affordability to ensure reasonable rates, and a change to a prior approval system from the current file and use system. Erin Collins, state affairs manager for the National Association of Mutual Insurance Companies (NAMIC), said, "Both Granholm and Hollowell criticize the industry for growth of premium during the last 20 years. In 1989, the average price of a car was $15,350 while in 2008 it was $28,715 - an increase of 87 percent. Milk was $2.62 per gallon in 1989 and today is $3.38 - a 29 percent increase. Does the governor want to freeze these prices, too? Of course, insurance is going to cost more."

Mich. Gov. Calls for Auto Rates Freeze, Insurers Object (National Underwriter 2/5/09)

Filed under: