MI drivers face hike in car insurance

GRAND RAPIDS, Mich. (WOOD) - Starting July 1, Michigan drivers have been paying more for their car insurance.

It's an increase of about $20 per policy, totaling $124 per car in a household. It goes toward the Catastrophic Fund, which covers drivers in case they are seriously injured in a car crash.

But some West Michigan drivers are not happy.

"You get insurance going up and then all these other things like my property taxes, and everything went up from last year, but your salary remained the same, or, for some people, it went down," Aldin Velic said. "Yeah, it makes a difference overall. Every penny counts."

The Catastrophic Fund also covers unlimited medical costs and lost wages for drivers who suffer severe injuries, said Doug Warsen, who owns Integrity Insurance & Investments, in Dutton.

"If you're hurt in an auto accident, they pay your wages up to three years, so after three years, that is done," Warsen said.

All drivers pay toward the fund. Even insurance agencies don't have control over it.

"It's totally out of our control, it's totally out of the insurance companies' control," Warsen said. "Unfortunately, if you have auto insurance in Michigan, you're gonna pay this.

"So, there's no way of getting around it."

The increase is to cover what is now a deficit in the Catastrophic Fund, according to the Insurance Institute of Michigan.

But the fund isn't only receiving negative attention. Warsen sees both sides of the increase.

"If (you get hurt and) the bills get over $460,000, you then get paid out of this fund that we all have to pay into," he said. "Every year, they re-access how much you pay into it. July 1 is that date that happens.

"I mean, it pays unbelievably good benefits, it's a great thing to have, but yet, you gotta pay for it, too."

This year is an example of a deficit, hence a hike in the costs - but in other years, there have been surpluses and Michigan residents were reimbursed accordingly.