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The Michigan Insurance Code allows each insurer to determine its own rate level for coverage based on loss and expense data, sound actuarial principles, and judgment. However, it does in some instances such as personal auto and home insurance impose restrictions on the criteria that can be used to determine rates for individuals. For example, if a criteria is not specifically identified in Section 500.2111then it cannot be used to develop base rates, discounts, or surcharges except that any criteria meeting the requirements of Section 500.2110a could be used to develop a discount plan.
In addition, as long as there is competition in the market [[numerous insurers writing coverage) the Code makes it almost impossible for us to consider the rates of an insurer excessive based on the difference between it and other insurers' rates. Currently, there are hundreds of competing insurers for the various types of coverage offered in Michigan. Though insurers are allowed this freedom from rate regulation, it is important to note that anti-collusion laws do not allow non-affiliated insurers [[those who do not have the same owner) to discuss rate levels with one another to collectively determine the rate to be used in the market. In addition, consumers who are "eligible persons" pursuant to MCLA 500.2103 are provided access to personal auto and home insurance coverage from any insurer they choose via Sections 500.2117 and 2118. They cannot be denied these insurance coverages.
Within this competitive rating scenario, rates from insurer to insurer may vary by tens to hundreds of dollars for essentially the same coverage. Yet, market pressures force insurers to keep their rates at the lowest possible level in order to retain existing business and obtain new business, otherwise consumers will obtain coverage from other insurers who charge a lower total premium. Shop [[compare quotes) with at least five to ten different insurers prior to purchasing new or renewal coverage.
What a great consumer protection organization. They are really putting their best foot forward to hold the companies accountable to ensure that rates are set fairly. They require insurance carriers to offer coverage in all areas however they allow the companies to set their own rates with no oversight. Paraphrased: "You have to offer everyone coverage, but just make the prices outrageous where you don't want to do business and it will all work out for you" |