From The Detroit News
State Farm is lowering overall rates for auto insurance in Michigan, but not all customers will get a break.
State Farm Mutual Automobile Insurance Co., the largest auto insurer in Michigan and the country, will cut overall premiums for full coverage insurance this year by an average 4.1 percent statewide, saving Michigan customers about $45.2 million.
Those who carry only the insurance required by law, however -- typically those who can least afford insurance -- will see rates jump an average 5.7 percent statewide.
"The customers who have the most difficult time affording car insurance are the ones that will end up paying higher premiums," said June Houck, vice president in charge of State Farm's Michigan offices.
"Sometimes these customers have to choose between paying their insurance premium and feeding their family."
The rate changes will take effect with the next policy renewal.
Most Michigan policyholders will see a rate decrease, State Farm said in a statement Thursday.
The overall decrease is the result of fewer claims being filed under nonmandatory collision and comprehensive coverage, which pays for damage caused by vehicle crashes and losses such as theft and vandalism, State Farm said.
At the same time, the average claim related to mandatory coverage, which includes personal protection and liability coverage that pays for medical costs and other expenses after an auto accident, jumped 60 percent between 2000 and 2004 and 14 percent in 2005.
Mandatory coverage represents about 40 percent of a customer's premium, State Farm said.
Houck said that Michigan is the only state that requires motorists to have unlimited lifetime medical coverage on their car insurance.
"Customers should have the choice of determining what level of coverage they want to carry," she said. "If we could give customers a choice, they could save up to 20 percent on their policy."
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