Insurance Facts For Michigan Consumers: 2007 Buyers’ Guide to Auto Insurance

INSURANCE FACTS


F o r M i c h i g a n C o n s u m e r s












2007 Buyers’ Guide to
Auto Insurance














Toll-Free Consumer Assistance Line
877-999-6442

Department of Labor and Economic Growth
Office of Financial and Insurance Services
www.michigan.gov/ofis

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Dear Auto Insurance Consumer:
Each year the Michigan Office of Financial and Insurance Services (OFIS) conducts a survey of auto
insurance companies to find out what they charge for different policies in different areas around the state.
This rate survey is designed to show how much rates can vary from company to company and to help you
find the coverage you want at the best possible rate.

Companies represented in the guide are only those that are subject to Michigan's Essential Insurance Act,
which was passed by the legislature in 1979. This Act is designed to make auto insurance available to all
eligible Michigan citizens. It also allows companies to set their own rates without the prior approval of
the Commissioner of Financial and Insurance Services. This means that a company can change its rates
quickly to respond to the demands of the marketplace.

Because there are varying factors that affect what you pay for your insurance, it is not possible to show a
rate for every situation. We have instead chosen four examples to represent various insurance purchasers
and asked insurance companies to provide a rate for each example in the territories listed as of March 1,
2007.

It’s important to note that the rates included in this guide do not include all discounts (e.g., group
discount, multi-policy discount, insurance credit score discount) that could reduce your total insurance
premium. However, we’ve compiled a list of the most common discounts offered by the companies that
participated in this survey, along with some other basic discount information on pages 6-8 of this guide.
This list of discounts is NOT a comprehensive list. Companies add new discounts to their programs all
the time. Therefore, be sure to ask for a list of discounts that a company offers when you are shopping
around for auto insurance coverage.

It is critical when reviewing the survey material to remember that the rate comparisons in this guide are
designed to be used as a starting point for shopping for the best automobile insurance rate and do not
cover all situations.

I sincerely hope that you use this guide as a tool when shopping for auto insurance. To make your
shopping easier, we’ve also compiled a list of companies on page 19 that offer a website for consumers to
receive a premium quote via the internet. As always, you should contact an agent if you have specific
questions regarding coverage. If you need additional assistance, please contact our office toll free at 877-
999-6442 or via our website at www.michigan.gov/ofis.


Sincerely,

Linda A. Watters, Commissioner
Office of Financial and Insurance Services

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2007 Buyers’ Guide to Auto Insurance
Table of Contents



Page 1

Michigan No-Fault Automobile Insurance

Page 2

Optional Automobile Insurance Coverages

Page 3 – 4
Automobile Insurance Eligibility

Page 5

Saving Money on Auto Insurance

Page 6

Listing of Possible Discounts

Page 9

How to Use the Survey

Page 10

Insurance Companies in this Survey/Rating Territories

Page 11 – 18
The Michigan Automobile Insurance Survey

Page 19

Insurance Company Websites

Page 20 – 22
Shopping for Auto Insurance Worksheets








This consumers’ guide is a publication prepared by the Michigan Office of Financial

and Insurance Services (OFIS). You can view more publications by visiting the OFIS

web site at www.michigan.gov/ofis



Any insurance consumer who needs help with an insurance problem or who feels he or

she is not being treated fairly by an insurer, please call toll free 1-877-999-6442

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Michigan No-Fault Automobile Insurance

No-fault insurance is required by law in Michigan. Every car owner must buy certain basic coverages
in order to register a vehicle in Michigan. It is against the law to drive, or let your car be driven,
without no-fault insurance. The basic no-fault policy has three parts:


Personal Injury Protection (PIP)
except in certain special situations. These are
If you are hurt in an auto accident, this part of
some of the circumstances under which you
your no-fault policy will pay all of your
could be sued:
medical costs. It will also pay, up to a
• If you cause an accident in Michigan in
maximum amount, for the wages you would
which someone is killed or seriously
have earned if you had not been hurt, for up to
injured.
three years.
•
In 2007, the allowed amount under no-fault is
If you are involved in an accident in
$4,589 per month. If you are killed in an
Michigan with a non-resident who is an
accident, your policy will pay your family up
occupant of a motor vehicle not registered
to the monthly amount for three years, based
in Michigan.
on what they would have received from your
• If you are involved in an accident in a
earnings and fringe benefits. You may also be
state other than Michigan.
entitled to up to $20 per day in replacement
services. This is to pay for services you are no
• For up to $500 in damages to another
longer able to provide for yourself or your
person's car, which is not covered by
family because you are injured, such as
insurance, if you are 50% or more at fault
housekeeping and yard work.
in the accident.
You may coordinate PIP coverage with any
Your required no-fault policy will pay up to
health or disability policy you have (except
your coverage limit amounts if you are sued or
Medicaid, Medicare or a Medicare
are legally responsible for damages in these
supplemental policy) to reduce your PIP
situations.
premium. The health or disability plan then
becomes the primary payer for medical or
The minimum required BI/PD coverage limits
wage loss expenses, and the auto policy would
are:
cover remaining medical or wage loss
expenses. These auto insurance coverages are
• Up to $20,000 for a person who is hurt or
also called excess medical and excess wage
killed in an accident.
loss.
• Up to $40,000 for each accident if several

people are hurt or killed.
Property Protection Insurance (PPI)
No-fault will pay up to $1 million for damage
• Up to $10,000 for property damage in
your car does in Michigan to other people's
another state.
property, such as buildings and fences. It will
also pay for damage your car does to other
These limits are often described as 20/40/10.
people's properly parked vehicles.
Courts sometimes award more than these

amounts. If this happens, you would be
responsible for paying the amount not covered
Residual Liability Insurance⎯Bodily
by your policy. To protect themselves, many
Injury and Property Damage (BI/PD)
people buy extra liability insurance.
The no-fault law protects insured persons from
being sued as the result of an auto accident

Michigan Office of Financial and Insurance Services – Auto Guide
Page 1

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Optional Automobile Insurance Coverages
There are some optional insurance coverages you may wish to consider. State law does not require
that these coverages be purchased.
Your no-fault insurance does not pay for repairs to your car if it is damaged in an accident. If your
car is properly parked and hit by another car, the other driver's insurance will pay for your repairs.
Except for this situation, the only kinds of auto insurance that pay for repairs to your car are collision
and comprehensive coverage. Several of the examples in the guide include these optional coverages.

Collision Insurance
Comprehensive Insurance
This coverage pays for repairs to your car when
This coverage pays for your car if it is stolen
it is damaged in a crash. There are three basic
or for repairs if it is damaged by a falling
kinds of collision insurance to choose from:
object, fire, flood, vandalism, or collision with
broad form, standard, and limited. Collision
an animal.
insurance is usually sold with a deductible. A
Uninsured Motorists Coverage (UM)
deductible is the money you agree to pay
toward the cost of repairs before the insurance
This coverage will pay if an uninsured motorist
company steps in and pays the rest. The larger
seriously injures you or a member of your
the deductible, the lower the cost of your
family. Uninsured motorists coverage is usually
collision insurance.
sold with limits of $20,000 per person and

$40,000 per accident (20/40). This coverage
Broad Form collision pays for damages
will not pay for damage to your vehicle.
regardless of fault, with a deductible that
applies only if you are substantially at
fault.
Standard collision pays for damages
regardless of fault, with a deductible that
always applies.
Limited collision pays only if you are not
substantially at fault, and may or may not
have a deductible.
Michigan Office of Financial and Insurance Services – Auto Guide
Page 2

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Automobile Insurance Eligibility

This guide is a survey of rates for four sample driver households who are eligible for auto insurance
under the law. An eligible person for auto insurance is a person who has a car registered in Michigan
or has a valid Michigan driver’s license. However, there are times when a company can refuse to
insure you.


Reasons for Denial
the car you want to insure does not meet
You can be turned down for auto insurance if:
Michigan safety requirements.
you are not
within the past
required by
two years,
law to have

your auto
no-fault
Insurance Eligibility Points
insurance has
insurance.

been cancelled
your driver’s
Insurance companies assign insurance eligibility points
because of
license is
for certain traffic violations.
non-payment
suspended or

of premium.
revoked.
Insurance eligibility points are not the same as
This can be
points on your official driving record. They are

waived if you
within the
simply a guide to help the company decide whether you
pay the entire
past five
are eligible for auto insurance. You can be turned down
premium on
years, you
for auto insurance if you have seven or more eligibility
the policy you
have been
points from violations within the past three years.
are buying in
convicted of

advance.
trying to
How insurance companies assign eligibility points:
defraud an
the insurance

insurance
you want to
Driving more than 15 mph over the speed limit
company, or
buy requires
(careless driving) - four points
have been
you to be a

denied
member of a
Driving 11-15 mph over the speed limit
payment of a
group, club or
– three points
claim over
organization

$1,000
and you do
Driving 15 mph or fewer over the speed limit on
because there
not join the
freeways that used to have a maximum speed limit of
is evidence of
organization.
70 mph - two points
fraud on your
your driving

part.
record causes
Other moving violations - two points
within the
you to have

past three
more than the
The first accident in which you are more than
years, you
allowable
50% at fault - three points
have been
number of

found guilty
''eligibility
The second and all following accidents in which you
of a felony
points.''
are more than 50% at fault – four points
with a motor
you do not
vehicle,
meet the
driving under
requirements
the influence
of a
of alcohol or
company's
drugs, failing to stop at the scene of an
underwriting rules. (See Company
accident, or reckless driving.
Guidelines on following page).
Michigan Office of Financial and Insurance Services – Auto
Guide
Page 3

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Automobile Insurance Eligibility
Company Guidelines
have difficulty finding insurance through
Insurance companies also use certain
regular companies. Any licensed agent can help
guidelines, called underwriting rules, to help
you apply for insurance through the Facility.
decide whether they will insure you. These

rules may be different for each company, but
Eligible Persons
each company must apply its rules in the same
If you are a person who is eligible for auto
way to everyone. For example, a company
insurance, read on to see how you can use this
may refuse to insure you if it does not have a
survey and perhaps reduce the cost of your
rate for your type of car, or if your car is very
auto insurance.
expensive to repair or replace (such as custom

or antique cars).
The Michigan Office of Financial and

Insurance Services has additional information
Ineligible Persons
available regarding auto insurance. Please visit
If you find you are not eligible for auto
our web site at www.michigan.gov/ofis or call
insurance, you may want to ask your agent to
us toll free at 877-999-6442 to obtain more
apply to the Michigan Automobile Insurance
information.
Placement Facility for you. The Facility was
created to offer insurance to those persons who
Michigan Office of Financial and Insurance Services – Auto
Guide
Page 4

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Saving Money on Auto Insurance
The survey rates have been determined using the rating factors specified in each example. However,
your actual premium will be determined using the characteristics of your household members and
vehicles. It is important to shop around to find the lowest premium, but there are other ways to
further reduce your cost of auto insurance.

Physical Damage Deductibles
health or disability coverage, through your
Increasing your deductibles on the physical
place of employment for example. Ask your
damage coverage (i.e. comprehensive and
agent about the option to coordinate health or
collision) can make a significant difference in
disability coverage with your auto insurance
the cost of your policy.
PIP coverage. You may coordinate PIP

coverage with any other health or disability
PIP Deductibles
policy you have (except Medicaid, Medicare
Even if you don't have other health or
or a Medicare supplemental policy) to reduce
disability coverage, many companies offer PIP
your PIP premium. When you coordinate
coverage at a reduced rate if you choose to
coverage, your health/disability policy
pay a deductible on the medical or disability
becomes the primary payer for any personal
benefit. The deductible may be up to $300 for
injury claims related to your auto accident.
each benefit and would be paid by the
Your auto insurance coverage pays for
policyholder and any other household member
reasonable expenses not covered by the
covered under the policy. You can choose a
health/disability policy. Coordination of
deductible on medical coverage only,
health/disability and auto insurance benefits
disability only, or both.
applies only to the policyholder and family

members covered under the policies.
Group Insurance Coverage

Many companies offer group auto insurance
Senior Citizen and Retiree Discounts
coverage at reduced rates to members of
(Work Loss Waiver)
qualified groups, organizations, associations
If you are a senior citizen, aged 65 or older,
and trade or business associations (i.e. AARP,
the law requires a company to offer you a
teacher’s association, university alumni
reduced premium if you drive your vehicle
association). Credit union members and
less than 3,000 miles per year. A retired
employees of various businesses may also be
person aged 60 or over, who does not have
eligible. If you are a member of one of these
income from work, must also be offered the
types of groups, ask your agent if you qualify
option to waive coverage for work loss that is
for group coverage. More than one insurer
paid under the PIP coverage. A person may
may offer reduced rates to your group, so you
waive coverage for himself or herself and an
may want to check with several agents, or ask
eligible spouse and receive a reduced premium
your agent to check with several companies.
for PIP coverage. Keep in mind that the work

loss coverage may not be eliminated
Coordination with other Health,
completely from the no-fault policy since it
Disability Coverage
still applies to other persons who may be
Your personal injury protection (PIP)
injured in or by the policyholder's vehicle.
premium may be reduced if you have other



To save even more money
review the listing of possible discounts on the next page.

Michigan Office of Financial and Insurance Services – Auto
Guide
Page 5

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Listing of Possible Discounts
Many insurers offer discounts for safety features like anti-lock brakes, air bags and anti-theft devices.
You may also be eligible for a discount if you have two or more policies with the same insurance
company (i.e. homeowners and auto policies). If it’s a significant discount, it may be worth insuring
both your auto and home with the same company.

We have asked the insurance companies that participated in this survey to provide us with a list of
their discounts. We have compiled a list of the most common discounts that the participating
companies offer on the following page. This list of discounts is NOT a comprehensive list.
Companies add new discounts to their programs all the time. Therefore, be sure to ask for a list of
discounts that a company offers when you are shopping around for auto insurance coverage.

Your auto insurance premium is broken down into the types of coverage you choose to purchase (e.g.
mandatory no-fault coverage, optional comprehensive and/or collision coverage). Because of this,
any auto insurance discount you receive from your insurance company will typically only be applied
to certain portions of your premium. For instance, if your vehicle qualifies for an anti-theft discount,
the discount would typically be applied to the portion of your premium that you pay for
comprehensive coverage. If you do not carry comprehensive coverage on your vehicle, you would
not qualify for this discount. Each company decides what discounts it will offer and what insurance
coverages (e.g. personal injury protection, comprehensive, collision) will be affected by each
discount. The company must then offer these discounts to all individuals who qualify.

Therefore, the attached list of company-offered discounts should only be used to offer you some
guidance into the vast number of discounts that are available when shopping around for auto
insurance. It is important to realize that only the insurance company or one of its representatives,
such as an insurance agent, will be able to provide you with an accurate premium quote based on
your own personal characteristics, including any and all company offered discounts.

Remember: Insurance companies can develop a discount for anything that may reduce the
company’s losses and expenses. These discounts must then be offered to all individuals who
qualify. It is critical when shopping around to ask for all the discounts the company offers.



Michigan Office of Financial and Insurance Services – Auto
Guide
Page 6

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Auto Insurance Discounts
Student Claim
or
Air Bags Anti-Lock Anti-Theft
Multi
Multi
Credit
Away at
Good
Ticket
Companies
Brakes
Vehicle
Policy
Score
School
Student
Free
Allstate Ins Co
20-30%
0-10%
5%
10-30%
5-10%
10%
10%
9-32%
Allstate Prop & Cas
20-30%
10%
5%
5-17%
10%
10%
0-38%
American Insurance Co
10-30%
5%
5-15%
18-30%
2-6%
American Int'l Ins Co (AIG)
10-45%
5%
5-15%
38-58%
American Int'l South (AIG)
10-30%
3%
5-15%
AMEX Assurance Co
20-30%
5%
5-10%
10-14%
30%
Amica Mutual Ins Co
20-30%
5-15%
2-10%
10%
10%
Auto Club Ins Assn
10%
5-25%
20-25%
10%
0-44%
10%
Auto-Owners Ins Co
20-35%
5%
5-10%
21-25%
5-13%
0-55%
25%
5-10%
Bristol West Preferred
16-33%
10%
Cincinnati Ins Co
20-30%
5-15%
10%
5-10%
10%
5-15%
Citizens Insurance Co of America
20%
5%
5-25%
20-30%
13%
0-55%
Citizens Insurance Co of Midwest
25%
16-25%
3-5%
Dairyland Insurance Co
5%
15%
5%
Emcasco Ins Co
25%
15-40%
Employers Mutual Cas
25%
15-40%
Encompass Prop & Cas Co
30%
5%
5-15%
20-25%
20%
12%
Esurance Insurance Co
0-30%
10%
10%
Farm Bureau General
13-24%
15%
5-25%
5-23%
Farm Bureau Mutual
13-24%
15%
5-25%
5-23%
Farmers Ins Exchange
10-30%
5%
3%
20%
5-49%
15%
Federal Ins Co (Chubb)
20%
5%
5-15%
20%
40%
Frankenmuth Mutual
15-30%
5%
5-20%
20%
25%
5-48%
25%
5-10%
Fremont Insurance Co
20-35%
5%
5-20%
20%
20%
10%
3-9%
GEICO Indemnity Co
10%
5%
20%
Grange Insurance of MI
10-15%
2-20%
20%
10%
2-69%
Great Lakes Casualty
20-30%
5-15%
1-37%
1-37%
10%
Great Northern (Chubb)
20%
5%
5-15%
20%
40%
Harleysville Lake States
5%
5%
5%
15-25%
15%
12-55%
10%
10%
Hartford Casualty
10-20%
3%
5-15%
5%
Hartford of the Midwest
10-20%
3%
5-15%
5%
Hastings Mutual Ins Co
15%
5%
5%
15%
0-39%
3-15%
Home-Owners Ins Co
20-35%
5%
5-10%
21-25%
5-21%
0-55%
25%
5-10%
Horace Mann Ins Co
5%
0-30%
7-17%
0-50%
IDS Property & Casualty
20-30%
5%
5-10%
10-14%
30%
Integon National Ins Co
10%
5-20%
10-20%
Liberty Mutual Fire Ins
30%
10%
5-25%
2%
25%
5%
Merchants Mutual Ins Co
20-30%
7%
20%
15%
25%
10%
Mercury National Insurance Co
10-15%
5%
5%
Metropolitan Direct P&C
5-40%
5-10%
4-5%
10%
Metropolitan General
5-40%
5-10%
4-5%
10%
Metropolitan Prop & Cas
5-40%
5-10%
4-5%
10%
Michigan Office of Financial and Insurance Services -- Auto Guide
Page 7

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