There are more than 1.5 million drivers estimated to be on Michigan's roads without insurance, the National Association of Insurance Commissioners.
That's not hard to believe. If you have any doubts, just check the local district court sentencings. It occurs more than you think.
The 2011 Insurance Research Council report found that one in five or 19.5 percent of Michigan drivers are behind the wheel without insurance. The number of Michigan uninsured drivers is up from 13 percent in 1997.
"Law-abiding drivers are impacted by those on the roads without auto insurance," said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan. "The number of uninsured drivers is a problem that is growing in Michigan and is contributing to the rise in auto insurance costs."
The average auto insurance premium in Michigan is $1,042, according to the most recent data (2009) from the National Association of Insurance Commissioners. That premium is the 11th highest in the country.
Michigan mandates that all drivers purchase the highest medical coverage in the country. Motorists here are required to purchase unlimited, lifetime medical benefits as part of their auto insurance policies.
The average claim for that coverage rose 166 percent, from $13,617 in 2000 to $36,245 in 2010.
Driving without insurance in Michigan is a misdemeanor and punishable by up to a $500 fine and a year in jail.
Michigan drivers can purchase uninsured/underinsured motorists coverage that provides protection when they are involved in an accident with an uninsured or underinsured motorist.
While not reducing the number of uninsured drivers on the roadway, the coverage provides a way that drivers can deal with the financial consequences of accidents with hit-and-run or uninsured motorists, according to the insurance industry representative.
Uninsured drivers in Michigan cannot recover no-fault benefits. However, their passengers can.
"All Michigan consumers pay for the benefits provided to these uninsured motorists through a state fund created to pay for unlimited, lifetime medical costs of certain people injured by uninsured motorists. The assessment for that fund increased 194 percent since 1999," said Kuhnmuench.
One way to lower costs, is to review insurance policies.
The Insurance Institute of Michigan offers 10 ways to help reduce what policyholders pay for auto and homeowners insurance.
- Get Insurance Institute of Michigan's free kit to help comparison shop. By shopping around, you may be able to save hundreds on your policies. To assist insurance buyers, the Insurance Institute of Michigan has developed a free packet of information with tips to save on insurance and it is available visiting IIM's website at www.iiminfo.org or calling 517-371-2880.
- Choose higher deductibles. By increasing deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comp-rehensive coverage cost by 15 percent to 30 percent. The same is true for home insurance deductibles.
- Drop collision and comprehensive coverage on older cars. It may not be cost-effective to continue insuring cars worth less than 10 times the amount pay for coverage. Auto dealers and banks can tell you the value of a car, or you can look it up online at Kelley Blue Book (www.kbb.com) or NADA (www.nada.com).
- Join a group. Many companies offer discounts to policyholders for belonging to certain professional, alumni or service groups. It is important to ask since discounts vary by company.
- Buy your home and auto policies from the same insurer. Most companies that sell homeowners insurance also sell auto insurance policies. Some insurance companies will reduce your premium by 5 percent to 15 percent if you buy two or more insurance policies from them.
- Reduce your daily driving. The more you drive, the more likely you are to be involved in a crash - and the more you pay for insurance. Some insurance companies offer discounts for driving fewer than a certain number of miles.
- Be safe. Install smoke detectors and fire extinguishers in your home. Always wear your safety belt. Insurance companies offer discounts to policyholders who play it safe. Make sure to ask since discounts vary by company.
- Choose the right car. Before buying a car, compare insurance premiums. Characteristics such as vehicle size, weight and body type play a role in determining premiums. Vehicle loss information is available online from the Insurance Institute for Highway Safety/Highway Loss Data Institute at www.iihs.org/research/hidi/composite_intro.html.
- Keep tabs on your credit. Many insurance companies provide a discount based on certain credit characteristics. To improve your credit-based insurance score, pay bills on time, keep balances reasonable on credit cards and only apply for and open new accounts as needed.
- Eliminate duplicate coverages. If you belong to an auto club that provides towing services or the auto manufacturer provides it, make sure you aren't paying for the same coverage in your auto insurance policy.