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Over the past few years, many studies of the auto insurance industry have shown that no one pays more for their cars' coverage than residents of Michigan, and Detroit specifically. Now, state officials are trying to determine what they can do to alleviate this potentially significant problem, but some experts wonder just how much wiggle room they'll be able to find in their current system. Until such time as changes can be made to reduce the cost of insurance in the state, it may be wise for agents to try to explain the situation to their clients, so that they know exactly why they pay what they do for coverage.

Many experts point out that the reason Michigan drivers pay so much more for their auto insurance coverage is that the state has a unique no-fault insurance system, according to a report from the consumer savings site NerdWallet. And while similar systems exists in several other states as well, the particular problem for Michigan is that it has not set a cap on the amount consumers can get straightaway from their insurers when they file a claim. That means that people who are injured in an auto accident would likely be able to get unlimited benefits for the remainder of their lives.

What's being done?
With this in mind, it seems that many in the state's legislature are now trying to smooth over the issue by altering the no-fault system to include caps and treatment limits, the report said. Insurance groups and even some consumer advocates support even bigger changes to the system, potentially removing the no-fault rules altogether, as these changes would have little impact on consumers. Fewer than half a percent of all claims end up exceeding the proposed cap of $1 million. Others, however, claim that even removing the no-fault rules wouldn't do much to bring down insurance costs, for various reasons, and that new changes need to be proposed as well.

Insurance agents who can help perplexed or frustrated consumers better understand their policies, and why costs have to be the way they are, are often those who have the highest customer service ratings, simply because of how important that relationship and understanding can be. Further, adding in the ability to occasionally find them discounts can likewise serve to keep their retention rates as high as possible, even if their premiums remain sizable in comparison with those seen in other parts of the country.

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