Michigan Auto Insurance Reform
Oct. 20 National Teen Drivers Safety Week
Parents encouraged to talk to teen drivers about the importance of driving safely
How Parents Can Help Teen Drivers
Motor vehicle crashes are the leading cause of death for teens 15-18 years of age in the United States, ahead of all other types of injury, disease, and violence. Inexperience and risk-taking behavior are factors that increase the crash risk for teens.
“Parents can help protect their teens by talking with them about how to avoid risky driving behaviors,” said Michael L. Prince, OHSP director. “Because of their lack of experience, teen drivers are at a greater risk of being killed or injured in a crash. That is why it is so important to start a conversation with teens and encourage safe driving practices.”
In Michigan, teens and young adults age 15-20 years old, accounted for 7.6 percent of all traffic deaths in 2018, with 55.4 percent of those deaths being the driver. In addition, 9,637 teenagers and young adults were injured in motor vehicle crashes in 2018, representing 12.7 percent of all people injured in a crash.
Michigan, and other states, have adopted Graduated Driver Licensing (GDL) laws for teen drivers as a way to promote safety behind the wheel and reduce serious injury and death in a crash. Teens face the greatest risk of a crash during their first year of driving. GDL programs limit high-risk driving among teens and can reduce teen crash risk by as much as 50 percent. For more information on the GDL program in Michigan, visit: www.michigan.gov/teendriver.
Opportunity
A unique opportunity for teens to teach other teens about safe driving, is the Strive for a Safer Drive (S4SD) program. Students at every Michigan high school can participate in S4SD, with cash prizes awarded to the top five winning entries. Parents and teachers are urged to discuss the opportunity with teens and encourage participation in the program. Applications are due Nov. 14. Application information, including examples of winning campaigns, can be found at: https://www.michigan.gov
The National Highway Traffic Safety Administration also provides information parents can use to help keep teens safe including tips on seat belt safety, distracted driving, impaired driving, and speeding. For more details on Teen Driver Safety Week, including safe driving tips for parents and teens, visit: www.nhtsa.gov/road-safety/teen-driving.
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Independent Agents vs. Captive Agents
When you’re in the market for insurance, whether it’s home, auto or commercial insurance, you typically work with an agent who can help you find a policy that meets your needs. But most people don’t know that there are two different kinds of insurance agents—captive and independent agents.
So what is an independent insurance agent vs. a captive insurance agent? In short, captive insurance agents are contracted to work for one insurance company and can only sell that company’s policies. On the other hand, independent agents are contracted to work with a variety of insurance companies and can sell policies from multiple providers.
As a consumer, it’s important to understand the distinctions between captive and independent agents. Although they sound the same, some people may benefit from working with a captive agent and others with an independent agent. In this article, we’ll explain the key differences and help you decide which agent is best for you.
Captive Agents
Most of the major insurance companies, like State Farm, Allstate and Farmers, use captive agents to sell their insurance products. Their agents are only selling policies from that one insurer, so the agents are experts at knowing the different policies available, discounts and coverage add-ons for their one carrier.
Because of that, they can be helpful for people who are buying insurance for the first time or for people who aren’t sure how much coverage to purchase.
Client satisfaction is crucial for captive agents because they get a commission for every earned sale. However, their commission rate tends to be lower than for independent agents because they are also paid a salary from the insurance company and get financial assistance with costs like advertising and hiring.
Independent Agents
Independent agents partner with several insurance companies of their choosing to sell certain policies from each provider. For example, an independent agent might contract with Pioneer Insurance, Frankenmuth Insurance,and Citizens Insurance and sell any of their auto and home insurance policies.
Many consumers like working an independent insurance agent because an independent agent gives the customer more options. They aren’t locked into purchasing from a small number of plans that might be too expensive or not a great fit for their coverage needs. Those options help people shop around for plans before settling on one.
Which is better?
Generally speaking, there isn’t one better type of insurance agent. Whether you choose to work with a captive agent or an independent agent depends on you.
The main benefit of working with a captive agent is that they have extensive knowledge of their insurers products and policies, because they have one carrier. However, working with a captive agent tends to be more expensive, due to extra fees that the insurance company charges.
If you work with an independent agent, you’ll get more options, which also means a wider price range. But independent agents have in-depth knowledge about numerous carriers, where captives only need to learn one. Also, independent agents usually charge less because there isn’t one parent company to support.
If you’re concerned with keeping costs low, working with an independent agent will save you money. Keep in mind that you should already have a general idea of what you’re looking for before meeting with an agent.
Frequently asked questions
What type of insurance do independent agents and captive agents sell?
Both independent and captive agents can sell any kind of insurance they want. Some choose to sell every product that an insurer offers, while others specialize in a few areas, like home and life insurance.
Should I choose an independent agent or a captive agent?
There are a few main reasons why you would choose an independent vs. a captive agent. The first is cost—working with an independent agent will be cheaper than working with a captive agent. Secondly, independent agents can offer a wider variety of plans, so you have more choices and a wider price range to work from.
What is Insurance and Why is it Important?
Have you ever had a moment — while looking at your insurance policy or shopping for insurance — when you’ve thought, “What is insurance? And do I really need it?”
You’re not alone.
Insurance can be a mysterious and puzzling thing. How does insurance work? What are the benefits of insurance? And how do you find the best insurance for you? These are common questions, and fortunately, there are some easy-to-understand answers for them.
To help, here are a few simple insurance explanations:
What is insurance?
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you’ll receive an insurance policy, which is a legal contract between you and your insurance provider. And when you suffer a loss that’s covered by your policy and file a claim, insurance pays you or a designated recipient, called a beneficiary, based on the terms of your policy.
The most difficult thing about insurance is that you’re paying for something you hope you never have to use. Nobody wants something bad to happen to them. But suffering a loss without insurance can put you in a difficult financial situation.
What are the benefits of insurance?
Insurance is an important financial tool. It can help you live life with fewer worries knowing you’ll receive financial assistance after a disaster or accident, helping you recover faster. When it comes to life insurance, this could mean your family doesn’t have to move out of the house or that your kids can afford to go to college. For auto insurance, it could mean you have extra cash in hand to help pay for repairs or a replacement vehicle after an accident. Insurance can help keep your life on track, as much as possible, after something bad derails it.
Your independent agent is a great resource to learn more about the benefits of insurance, as well as the benefits in your specific insurance policy. For example, you may have access to perks such as free roadside assistance, risk control consulting for businesses, or cash value in a life insurance policy, in addition to your insurance coverage.
And in some cases, like auto insurance and workers’ compensation, you may be required by law to have insurance in order to protect others.
How does insurance work?
Insurance is essentially a gigantic rainy day fund shared by many people (called policyholders) and managed by an insurance carrier. The insurance company uses money collected (called a premium) from its policyholders and other investments to pay for its operations and to fulfill its promise to policyholders when they file a claim.
Because of the unpredictable nature of natural disasters — like tornadoes, hail, wildfires and hurricanes, and everyday disasters such as fender benders and kitchen fires — an insurance company’s main goal is to remain financially strong enough to handle anything that comes its policyholders’ way.
How do I choose an insurance provider?
Here are a few things to consider when choosing an insurance company to work with:
- Insurance coverage. What types of insurance does the company offer? Can you buy all of your insurance through the company and receive a discount?
- Financial strength. Would the company be able to pay your claim? Look to U.S. credit rating agency AM Best to determine the company’s financial strength.
- Agency model. Would you prefer the help of a local agent? Or would you prefer to manage your insurance on your own?
- Customer service. Do others recommend this company? What are people saying about it in online customer reviews?
When in doubt, contact Shield Agency and ask them any questions you have about insurance. Shield agents are insurance experts with the knowledge to guide you through the process and help you find the best protection for you and the people and things you care about most.
16 Car Insurance Discounts
16 car insurance discounts to ask your agent about
You don’t have to skimp on quality to get the kind of car insurance that fits your unique needs and your budget. In fact, car insurance discounts can help you get the best of both.
Shield Agency is a knowledgeable resource that can help you become aware of and take advantage of any car insurance discounts that are available to you. The next time you speak with your insurance agent, use this list to get the conversation started. Consider asking about these 16 car insurance discounts to see if you qualify.
Common car insurance discounts
These discounts are available through most car insurance companies
- Safe driver discount – Haven’t been at fault in an accident or received a ticket in a long time? Having a good driving record can save you money on your car insurance.
- Good student discount – If you have a student on your policy with no chargeable accidents, excessive speed violations or major violations, you could qualify for this discount.
- Multiple policy discount – When you purchase multiple policies with the same insurer (home, auto, life, etc.), you may be able to “bundle” your policies and receive this discount.
- Multi-vehicle discount – If you have multiple vehicles you’re adding to your auto policy, you could receive this discount.
- Paid in full discount – For policyholders who pay in full before their due date, you could receive this discount.
- Electronic payment discount – Paying your bill online or setting up automatic payments can help reduce your car insurance costs with this discount.
- Student away discount – You can receive this discount while your college student is away at school and not using a vehicle.
- Homeowner discount – Own your home, townhouse or condominium? You’ll qualify and be able to save on your auto insurance with this discount.
- Legacy loyalty discount – Your child will receive this discount when they move off your policy and onto their own policy with the same insurance carrier.
- Advance quote discount – A new customer whose auto policy starts at least one day after receiving their quote will receive a discount.
Less common car insurance discounts
Some car insurance carriers offer unique discounts to help you save on your auto insurance.
- Education discount – You’ll receive a discount if you or your spouse has completed post high school education. This discount is based on the highest level of education achieved.
- New beginning discount – This discount is available for customers who are recently divorced or separated.
- Full coverage discount – For those who purchase Collision Coverage on all vehicles on their policy, you can receive this discount.
- Occupation discount – You’ll receive a discount based on the occupation level of you or your spouse.
- Violation free discount – You’ll receive this discount if you’ve had no chargeable violations for three or more years.
- Young operator renewal – New drivers will receive a discount based on the length of the current customer’s policy with Grange.
Contact our office and let us find the best policy for your best coverage!
Michigan PIP Reform Explained
What is it? What should you expect?
Michigan’s Auto Insurance Reform, it’s finally coming around the corner on July 2, 2020. As many of you know, Michigan passed a bill that will hopefully save many drivers money each year on their auto insurance. This is partially due to the PIP Reform coverage on your auto insurance policies. There are other parts to this, but this blog focuses on just the PIP portion of it.
WHAT DOES PIP STAND FOR?
Personal Injury Protection
WHAT DOES PIP COVER?
PIP is the coverage on your auto insurance policy that pays for the medical costs for auto-related injuries. This will cover not only the medical bills but for any long-term care, wage loss, and replacement services.
WHO DOES PIP COVER?
PIP will cover the named insured of the policy, also known as the policyholder and their resident relatives. Being a listed driver on the auto policy is NOT the same as being a named insured or a resident relative.
WHO IS A RESIDENT RELATIVE?
The definition of a resident relative can be difficult to define as not everyone’s family and living situations are the same. The generalized response would be anyone who is legally a relative of the named insured that permanently resides in the same home as the named insured. This would include the named insured’s children and spouse. Please have a conversation with your insurance agent if your family/living situation does not fall into the “traditional” circumstances.
WHAT ARE THE PIP OPTIONS?
Drivers will now have different options to choose from other than the unlimited PIP coverage. Currently, anyone with an auto policy in Michigan has an unlimited amount of PIP so there is no cap on how much an insurance company will pay out on a PIP claim. As of July 2, there will be options available, but it is important to know that not all options are available for everyone.
The options are:
- Unlimited
- $500,000
- $250,000
- $250,000 (with opt-out options for those listed on the policy with Qualified Health Coverage)
- $50,000 (only for named insureds enrolled in medicaid AND any spouse and all resident relatives have either Qualified Health Coverage, medicaid enrolled or covered under another auto policy with PIP coverage)
- $0 – Opt Out (only allowed if named insured has Medicare A and B AND if everyone else in the household has Qualified Health Coverage.)
The first 3 options have no stipulations so anyone could choose them. The last three options have certain requirements. It is important to discuss your health insurance circumstances with both your health insurance carrier and your auto insurance agent to know which options are available for you. Such as, does your health insurance fall under the “Qualified Health Coverage” under this new law?
WHAT IS QUALIFIED HEALTH COVERAGE?
As defined under the new law, Qualified Health Coverage is: health and accident coverage that does NOT exclude or limit coverage for injuries related to auto accidents/injuries and has an annual individual deductible of $6,000 or less per person. Medicare recipients with BOTH parts A & B would also qualify.
Medicaid and health care sharing ministries are examples of coverages that are NOT considered Qualified Health Coverage.
WHO DO YOU CONTACT ABOUT QUALIFIED HEALTH COVERAGE?
Call your health insurance company using the number on the back of your ID card. If your current health insurance is through your employer, you may be able to also contact your HR department. You may have to provide proof to your auto insurance company that you have the right kind of health insurance.
WHO DO YOU CONTACT ABOUT YOUR PIP COVERAGE CHOICE?
Call your auto insurance agent to discuss what options are available for you.
WHEN SHOULD YOU MAKE YOUR CHOICE / TAKE ACTION?
The beginning of June will be an ideal time to reach out to both your health insurance company to verify your coverage and your auto insurance agent. By this time, all auto insurance companies will have the rates available for the different PIP options. It is ideal to contact your health insurance carrier and get that answer, and then your auto insurance agent.
HOW WILL MY AUTO INSURANCE COMPANY OFFER THESE CHANGES?
Two options that most auto insurance companies are offering if you wish to change your PIP coverage to anything other than unlimited are: 1)You will be able to just make an endorsement (change) to your policy the same as if you were to swap a vehicle on your policy. 2) Some companies are requiring that your policy be rewritten so you would have a new policy vs just making the changes on the current one.
WHAT IS SHIELD INSURANCE AGENCY’S PLAN OF ACTION?
Shield has a plan in place starting in May to try and make this change go as smoothly as possible. We will be emailing all our clients we have email addresses for a quick 2 question survey for how they would like to address their auto policy regarding the new law. There are options to select if you already know your decision or you can select to have someone call or email you to discuss. For those who do not have an email address on file or who don’t respond to the emailed survey, we will be reaching out to you by phone prior to July 2.
To learn more, please feel free to email us at contactus@shieldagency.com or call or text us at 616-896-4600.
You can also visit https://www.michigan.gov/autoinsurance for more information.
Submitted by Agent Melissa Hunt
Auto No-Fault Legislation signed by Gov. Whitmer
Shield Insurance Blog | Auto No-Fault Legislation | Start a Quote Today!
FOR IMMEDIATE RELEASE
May 30, 2019
Gov. Whitmer Signs Historic Bipartisan Auto No-Fault Legislation
MACKINAC ISLAND, Mich. — Today Governor Gretchen Whitmer signed Senate Bill 1, auto-no-fault-legislation, which passed with overwhelming Senate Bill 1, to reform Michigan’s auto insurance system to guarantee lower rates for every Michigan driver, protect insurance coverage options, and strengthen consumer protections.
“By signing this legislation, we are providing relief to millions of drivers across the state and guaranteeing a better auto insurance system for everyone,” Whitmer said. “This historic deal shows that, when we put party aside, we can find common ground on our state’s toughest issues to provide realistic and affordable coverage options for drivers across Michigan.”
Senate Bill 1 reforms a broken auto insurance system and offers historic protections for drivers across our state. The bill, negotiated by Governor Whitmer with legislative leaders, will save drivers money by:
- Guaranteeing lower rates for drivers for eight years;
- Protecting people’s choice to pick their own Personal Injury Protection (PIP) options with coinciding PIP rate reductions, offering unlimited coverage (10% PIP reduction), $500K coverage (20% PIP reduction), $250K coverage (35% PIP reduction), $50K coverage for Medicaid eligible recipients (45% PIP reduction), or a complete opt out for seniors or anyone with sufficient private insurance (100% PIP reduction).
- Increasing consumer protections by banning companies from using non-driving factors, such as ZIP code, FICO score, gender, marital status, occupation, education attainment, and homeownership, to set rates.
- Setting fee schedules for hospitals and providers to prevent overcharging for auto-related injuries.
“I am proud to have worked alongside Senate Majority Leader Shirkey, Senate Democratic Leader Ananich, Speaker of the House Chatfield, House Democratic Leader Greig, and all members of the legislature to solve a problem that has been hurting Michigan families for far too long. We still have more important work ahead of us, and I have no doubt that we can seize on this momentum to pass a strong, bipartisan budget that fixes the damn roads.”
Senate Bill 1, auto-no-fault-legislation, sponsored by Senator Aric Nesbitt (SD-26), will be filed next week with the Office of the Great Seal and take effect at that time.
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Insurance Reforms: Resources to Help
Shield Insurance Blogs | Insurance Reforms | Contact us for more info
Insurance Reforms: Resources to Help
Insurance Reforms: The Department of Insurance and Financial Services (DIFS) has developed educational resources to help Michigan drivers navigate the state’s new auto insurance law. DIFS has launched a new website, www.michigan.gov/autoinsurance, created consumer guides, and now has a dedicated hotline, 833-ASK-DIFS (275-3437), and email address, autoinsurance@michigan.gov, where drivers can ask questions and file complaints related to auto insurance in Michigan.
In addition to creating these new educational resources, DIFS is also working to implement the legislation to ensure consumer protection and industry compliance.
In May 2019, Gov. Whitmer signed historic bipartisan auto no-fault legislation to lower costs for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections. These changes apply to auto insurance policies issued or renewed after July 1, 2020.
“Last year we worked closely with leaders from both political parties to preserve no-fault and create a better auto insurance system for Michigan drivers. Protecting policyholders and providing them access to affordable coverage is fundamental to the prosperity of our entire state,” said Whitmer. “Drivers are now encouraged to use these educational resources before making the important decision of choosing their auto insurance policy.”
The new site details changes in the law, new coverage options, shopping tips, and provides many other resources that help explain the new reforms and how they will affect auto policies in Michigan.
“DIFS is here to help Michigan drivers understand the new auto insurance law so they can decide on a policy that best fits their family’s needs and budget,” said DIFS Director Anita Fox. “We are focused on educating policyholders and implementing these reforms to ensure that consumers are protected and that companies are in compliance with the law.”
Following the signing of no-fault reform, DIFS began taking important steps to implement the new law. These measures include:
- Fraud Investigation Unit: DIFS has established a new unit to investigate criminal and fraudulent activity related to the insurance and financial markets and work with Michigan Attorney General Nessel and law enforcement to prosecute these crimes.
- New Consumer Forms on Coverages: DIFS developed new forms for insurance companies, agencies and agents to provide to drivers when choosing new coverage options.
- Independent Actuaries: In anticipation of an increase in auto insurance company rate filings, DIFS’ rate review staff is working closely with independent actuaries to ensure the filings are thoroughly reviewed and actuarily sound.
- Industry Bulletins: DIFS has issued more than 10 bulletins to the insurance industry regarding compliance in the areas of rate filing, reimbursement rates, and other enforcement issues.
Key Aspects of Michigan’s New Auto Insurance Law:
Lowers Costs, Maintains Highest Benefits
- Personal Injury Protection (PIP) Choice: Drivers will be able to choose a coverage level that is right for their family. The new limits equal or exceed the highest benefits in the country and Michigan is the only state where unlimited PIP medical coverage continues to be an option. PIP medical pays for medical care if policyholders are in an auto accident.
- Premium Reduction: Each insurance company will be required to reduce statewide average PIP medical premiums for eight years. Drivers’ overall premiums will depend on their individual circumstances and the coverage they select.
- Fee Schedule: The new law establishes a fee schedule designed to control the costs that medical providers may charge auto insurers for their services. This is similar to cost control provisions used by other types of insurance, such as health insurance. This fee schedule will make PIP medical coverage premiums more affordable for policyholders, but will not affect the services to which existing and future accident victims are entitled.
- Michigan Catastrophic Claims Association (MCCA) Assessment: The MCCA has already announced that as a direct result of the new law, it is lowering its per vehicle assessment starting July 2, 2020, which will save Michigan drivers at least $120 per car.
Increases Consumer Protections:
- Elimination of Certain Non-Driving Factors: The new law prohibits auto insurance companies from using sex, marital status, home ownership, credit score, educational level, occupation, and zip codes in setting auto insurance rates.
- Prior Approval: Auto insurance rates must now be filed with and approved by DIFS prior to being offered to consumers.
- Fines and Penalties: The new law allows for increased fines on insurance companies, agencies, and agents for certain violations of the law.
Auto No-Fault Reform Quick Facts
Shield Insurance Blog | Auto No-Fault Reform | Auto Insurance | Start A Quote Today
MICHIGAN AUTO NO-FAULT REFORM QUICK FACTS
On May 30, 2019, Governor Whitmer signed a historic bipartisan no-fault auto insurance reform bill to provide lower rates for Michigan drivers, protect insurance coverage options, and strengthen consumer protections.
When Does the New Law Take Effect?
The law currently requires you to carry unlimited medical coverage to pay for your expenses if you are injured in an auto accident. The new law allows you to choose a level of medical coverage when your policy renews after July 1, 2020. If you are already receiving payments from your auto policy due to injuries from an auto accident, you will continue to receive the current unlimited benefit regardless of the choice you make for the future. This is also true if you are injured in an accident between now and July 1, 2020.
Will My Auto Insurance Bill Be Lower When the Law Goes Into Effect?
Because the new law will allow drivers to choose a level of medical coverage, insurance companies are required to reduce the premium for this coverage (known as PIP coverage) so that there will be an average reduction per vehicle based on the level of coverage chosen. Your premium and savings will depend on the PIP option you select and other coverages you choose.
How Will I Know What Choices I Have and What to Choose?
The new law requires that agents and insurers give you a form that describes the benefits and risks of the coverage options. You may also want to talk with an insurance agent to discuss your personal auto insurance needs. In addition, DIFS’ website will be updated on an ongoing basis to provide the latest information to Michigan drivers as the effective dates of the new law approach. Please check www.michigan.gov/AutoInsurance for updates and educational materials.
7 Things to Know About Rental Car Coverage
Rental Car Coverage | Shield Insurance Blog | Auto Insurance |
After a car accident, you have enough things to worry about. Getting to work the next day shouldn’t be one of them.
We’ve all been there—and arranging alternate transportation while your vehicle is in a repair shop can be a hassle. But rental reimbursement coverage can help alleviate some stress after an accident while also saving you money.
Here are seven things you should know about before buying rental car reimbursement coverage:
1. Rental car insurance is optional.
Rental car reimbursement coverage does not automatically apply after an accident. As an optional coverage, it must be purchased separately. A common misconception is that auto insurance automatically covers the cost of a replacement rental car. In reality, you often have to select this coverage and apply it to the policy.
2. There is a limit.
You’ll likely have a per day and per occurrence limit. For example, if you have a 25/750 limit, your insurance company will pay up to $25 per day but no more than $750 per claim for the rental vehicle. Most insurance companies will offer several different options, allowing you to choose the limit that is right for you.
3. Your vehicle must be in the shop due to a covered loss.
Rental car reimbursement coverage can be used while your vehicle is being repaired after an accident or another covered loss, not for routine maintenance or leisure. So, if your car is at the body shop after an accident, a rental car is covered up to your limit. But if your car is undergoing routine maintenance that will keep it in the shop overnight or you are renting a vehicle for a family road trip, then rental reimbursement coverage would not apply.
4. You can use it right away.
After reporting a claim, if your vehicle isn’t drivable, you can be authorized for a rental car right away. Otherwise, you will be relying on the at-fault driver’s insurance company, and you may have to wait a little while before they can assess the claim and agree to pay for a rental car. With rental reimbursement coverage, there’s no waiting.
5. No need to worry about additional insurance.
For the most part, when you have collision and comprehensive coverages in your auto insurance policy, it will transfer to the rental vehicle, eliminating the need to purchase additional coverage from the car rental agency. Check with your Shield agent, who will be able to tell you when this applies.
6. You may not need it at all.
If you have access to another vehicle, rideshare service, or public transportation in the event your vehicle isn’t drivable, you may not need rental reimbursement coverage. But if you prefer the safety net of having a rental available if you need it, you may want to opt-in to this coverage.
7. Rental car insurance costs less than you might expect.
One year of rental car reimbursement coverage will typically cost less than one day of out-of-pocket rental car expenses. Want to learn more? Talk to your local independent Shield agent for complete details on rental reimbursement coverage.
Reference
– Insurance Information Institute
