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The Rathbun Agency Blog

All You Ever Wanted to Know About Insurance

Why Are Independent Agents So Important During No-Fault Auto Reform?

After July 1st, No Fault Auto Reform will take effect. This is the first major change in auto insurance benefits since 1972 when the no-fault auto insurance law was enacted in Michigan. A lot of the recent discussion has focused on the choice drivers will have on whether to keep unlimited medical coverage and the lowering of the State MCCA Fee due to cost controls on medical expenses.

However, another part of the law involves limiting certain rating factors that affect the rate you pay. Traditionally, insurance company rating systems have been very complex, and no two insurance companies use the same system. The rates depend on location, the replacement cost and safety factors of the vehicles insured, age, driving record, insurance credit score, and the list goes on and on. There is no one insurance company that has the most competitive rate because everyone’s factors are different. Part of the law change is limiting several of these factors, including not using zip codes to determine rates, not using having continuous prior insurance, not using your actual FICO credit score and several others. This could affect some customers quite a bit, either upward or downward.

Now more than ever it is important to have an independent agent. To understand why, it is helpful to know that there are three different distribution methods to buy auto insurance in Michigan. They are:

  • Buying it online direct from an insurance company where you call a 1-800 to get serviced by a different representative each interaction
  • Buying it from a direct writer where the insurance company uses a salesforce employed by them who can only offer you their company
  • Buying it from an independent agent such as The Rathbun Agency, who represents multiple insurance companies and help customers choose which of the companies is best for them

Quite often, we find people that buy direct online leave discounts on the table, as they don’t know insurance terms and don’t know how to get the discounts for which their eligible. Online companies often don’t give advice on the proper coverage, which could leave the consumer high and dry in a claim’s situation.

With direct writers there is the benefit of an agent, but the agent doesn’t have any control of the rates, and if the insurance company they work for doesn’t have discounts available that are beneficial, this prohibits getting the most competitive rate. This would also require calling each of the direct writer insurance companies and giving the same information over and over to get multiple proposals.

The advantage of an independent agent, such as The Rathbun Agency, is that we are able to gather the information we need to advise on the proper coverage, put a plan together and get proposals from multiple, reputable insurance companies.  We can provide advice on which fits your situation best and help you through the application process. After the purchase we are there to give advice should your situation change, answer coverage and billing questions, assist with the claims process, and act as a go-between to make sure your insurance company is treating you fairly and providing the service you deserve.  This will be a time of great upheaval in the auto insurance industry in Michigan, and we want you to know we are here to help guide you, your friends and family members if they are not getting the answers, they want from their insurance provider.