The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

You've seen the headlines:

Report: "Michigan has highest car insurance costs in nation"

"See", the insurance company propaganda machine says, "because of the no-fault insurance system in Michigan, we have the highest auto insurance premiums for drivers in the country."

Except that isn't true.

Michigan doesn't have the highest auto insurance rates in the United States. Michigan isn't even in the top 10 when it comes to the most expensive auto insurance rates in the United States today.

This was recently acknowledged by Insurance Institute of Michigan Executive Director, Pete Kuhnmuench, who agreed that Michigan is 11th in the country.

Michigan's No Fault System is also better than the insurance that exists in almost all other states.

Looking at the cost of auto insurance in Michigan but ignoring the benefits and protections misses the point: of the top 10 states with the highest auto insurance rates: 70% don't have a no-fault system.

The majority of the most expensive auto insurance states are tort-liability states. That means a driver who has suffered serious injury in an auto accident must sue the at-fault driver for all of his or her economic and medical losses, as well as pain and suffering. In states with very low minimum bodily injury insurance policy limits, it is taxpayers who end up footing the bill. But in states like Michigan, a seriously injured auto accident victim can recover necessary medical treatment for life from a catastrophic injury. Other states don't come close to offering Michigan's level of protection when it comes to compensating people injured in auto accidents.

So before you jump on the insurance company propaganda machine and "blame no-fault insurance for high insurance rates" band wagon, consider the facts. The overwhelming majority of the most expensive auto insurance states don't even employ a no-fault system, and of those that do, none come close to offering Michigan's level of protection.

When they said in the movie Spinal Tap that "this one is better…It goes to 11" maybe they were on to something.


  1. Steve: Please see my "Who Are the Bad Guys?" post. The reason that insurance companies are spewing this propaganda is because the system is working and more claims for 1st Party benefits are being paid, despite insurance company efforts to deny or delay them. Seriously injured people are getting the treatment they need and deserve from the private carrier who accepted the risk and took premiums for it, instead of from the taxpayers. And, when insurance companies actually have to pay claims out of profits, watch out for the propaganda "spin" and phoney-baloney efforts to "reform the system". Well folks, the system ain't broke; for the first time in a long time, it is working and insurance companies are being held accountable. It is no surprise that they don't like it. As Steve says, just don't "jump on their bandwagon". Nice job, Steve. Regards, Mark

  2. Gravatar for AG

    The insurers know that our premiums are not the highest, and they know that MANY factors influence premiums. They just don't want the public to know the truth.

  3. I agree and good observation. Sadly, the big difference between you and I and the insurance companies is that the insurance companies can spend millions from our own insurance premiums to wage a propaganda campaign to convince the people of this state otherwise.

  4. Gravatar for Mary Kim

    I was knocked down by a taxi while I was crossing the street in the crosswalk. That is how I started my journey of finding out about New York State's no-fault law. No one notified ME. I had to find out about it and notify the taxi's insurance company -- with the correct form -- within the 30 day deadline. I have enough vinegar in me to figure these things out, but I pity the person who does not. Finding and filling out the correct forms has been a full time job. If I did not have a fax machine at home, I cannot imagine what I would do. They have not paid a single doctor's bill yet. They keep demanding more forms. If it was no so awful, it would be so funny. I did not hit their car. Their car hit me! While I was in a crosswalk on a one-way street, in broad daylight, with no other moving cars or pedestrians around! Yet I am being made to feel like a criminal by the insurance company every day -- and it seems like the whole world is on their side. It's a very eye-opening experience. Even looking for articles on the subject in the mainstream press -- there are scarcely any that do not reflect completely the insurance company POV. So it was very good to find an intelligent commentary on the subject. Thank you!

  5. Gravatar for Nancy

    As a policyholder for over 20 years, I had reason to believe that my personal information was compromised so I requested a computer log to verify who within Frankenmuth’s organization had accessed my policy information which includes significant personal and financial data. Frankenmuth's policy per it's web page specifically purports to protect customer privacy and limits access internally to employees who have a business need to know. In actuality however, by their own admission, Frankenmuth Insurance does not have a computer system that allows them to determine who has viewed customer information.

    When asked for information on who accessed my information, I received a letter from their corporate attorney communicating what I would consider to be bogus rhetoric claiming “as a result of technology-related problems in retrieving such information” my request was declined A subsequent letter confirms that Frankenmuth’s computer systems purportedly do not allow them to track usage and determine who is viewing/accessing claims and customer information which means they have no way of managing customer and privacy for either first party insured’s or third party claimants. I can provide their corporate lawyer's letter's if you'd like - what insurance company has a corporate attorney not directly employed by the company answer a policyholder inquiry unless there is something to cover such as a system that doesn't allow for tracking usage.

    Frankenmuth Insurance company also purports in its commitment statement to policyholders to:

    Frankenmuth Insurance built a solid foundation adhering to its fundamental

    principles of honesty, integrity, unsurpassed customer service and conservative

    business practices.

    With much emphasis on Corporate Governance and common sense, this company located in Frankenmuth Michigan regularly violates its own commitment to policyholders by engaging in egregious conflicts of interest with board members that not only lack integrity, but are of blatant poor judgment for personal gain and detrimental to policyholders.

    The only policyholders invited to their annual policyholder meetings are employees and retirees of the company so that no one will vote against or challenge their elections.

    The board members are taken on annual trips with their spouses the week of the annual board meeting wherein on the last day, they (the board) are asked to vote on executive pay and bonuses. After a week of being wined and dined at exclusive resorts such as the One and Only Palmilla in Cabo and the Winn in Vegas the Frankenmuth executives know that the board will give them exorbitant raises and bonuses which is information they again refuse to disclose because of the public outrage their behavior would cause, adversely impacting their business. Getting what they want from the board afforded CEO Stanton a 12,000 sq foot retirement home newly constructed on a 1 million dollar plot of land at Bay Harbor overlooking Lake Michigan.

    One trip that Frankenmuth executives took 90 people on (those people were executives and spouses and agents and spouses) cost 5 million dollars for one week. That translates to about $53K per person. Bill Schutte pretends to care about the taxpayers dollars and how they are spent yet he thus far has refused to require Frankenmuth to disclose it's egregious spending of lavish trips and entertainment and or investigate the clear conflicts of interest with its board that are costing the taxpayers of Michigan huge dollars in increased premiums. On top of all of this, Frankenmuth admittedly has a computer system that does not track its employees use of policyholder information meaning the public is not safe from potential identity theft nor is the company safe from internal theft.

    Frankenmuth uses credit reports to jack prices of policyholders up - someones credit has no bearing on their ability to drive and the executives are laughing all the way to the bank with the board in their pocket from canned elections.

    I would implore you to write to CEO John Benson (address is One Mutual Ave, Frankenmuth Mi 48787) and ask where they hold their annual board meetings, who attends, who funds them and what the executive travel/spending budget is for the year. Ask him about a trip in 2008 for 5 million to Greece for 90 people and ask how this all impacts the premiums Michigan policyholders pay. You will get stonewalled due to the cover up that has gone on for years with this company. As a mutual company owned by their policyholders, they should reveal this information however they refuse.

Comments are closed.

Of Interest