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MEDICAL, LEGAL COST THREATEN AUTO INSURANCE IN MICHIGAN

 MEDICAL, LEGAL COST THREATEN AUTO INSURANCE IN MICHIGAN
 DEARBORN, Mich., Oct. 13 /PRNewswire/ -- Unless Proposal D passes at


the polls Nov. 3, medical and legal costs -- which now eat up 53 percent of every auto insurance dollar vs. 36 percent in 1986 -- pose a real threat to the survival of the current auto insurance system.
 AAA Michigan President Ronald L. Steffens also said at a Detroit Economic Club luncheon today (Oct. 13) that rising medical and legal costs are making auto insurance unaffordable for many members and other Michigan motorists. He said that one of every six drivers is now uninsured, largely due to cost.
 "If those costs continue to escalate, we'll soon have a product few motorists can afford," he added. "That's bad business and bad public policy."
 He said that the cost of providing physical damage coverage for a car in the past five years has been within the limits of inflation. However, the cost of medical coverage has risen four times faster than the 23-percent rise in inflation. Legal costs have skyrocketed five times the inflation rate.
 "Although most people believe the big cost increases in providing auto insurance come from thefts and bodyshop work, that's not the case," he stated.
 Steffens noted that the cost of protecting cars at AAA now requires 45 percent of every premium dollar, down from 60 percent in 1986. By comparison, the cost of medical and legal coverage combined has exploded in the same period.
 With passage of Proposal D and the resulting controls on legal and medical expenses, insurance rates will be cut an average of 20 percent, depending on coverages selected. Future rate increases will be held down and the key provisions of the current insurance law will be preserved.
 -0- 10/13/92
 /NOTE: For broadcast-ready actualities call 313-336-1323.
 CONTACT: Tom Free of AAA Michigan, 313-336-1512/ CO: AAA Michigan ST: Michigan IN: INS AUT SU:


SB -- DE018 -- 9426 10/13/92 15:04 EDT
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Publication:PR Newswire
Date:Oct 13, 1992
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