Broader Access to Health Insurance May Reduce Auto Insurance Liability

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  • The Patient Protection and Affordable Care Act’s coverage mandate might be something that many people may believe would have no impact on consumers’ auto insurance liabilities. However, data suggests that the controversial health care law may actually end up having a positive impact on liabilities for auto coverage overall, and may therefore bring premiums down for many drivers. This is something that insurance agents might want to explain carefully to their clients as a means of helping to improve the ongoing relationship.

    New data from the RAND Corporation projects that auto insurance liability claim costs will fall 1.3 percent by 2016 in Michigan alone as a result of the ACA coverage provision, according to a report from the Detroit News. There are a few reasons for this overall, but the largest is that people having health insurance prompts them to more regularly seek preventative care – and that generally makes them healthier.

    “If a healthier person is in an accident, they’re a lot less expensive to treat than somebody who already has a pre-existing injury,” said Heather Drake, vice president of governmental affairs for AAA Michigan, told the newspaper. “So I think to the extent that people are going to have more health insurance and may be able to partake in more preventative care, Michiganders will be healthier across the board and that will have an impact on claims.”

    What does that mean for auto coverage?
    Unfortunately for consumers, it appears as if the change in their auto insurance rates would probably be negligible overall, the report said. At least, that seems to be the case if there are only temporary, small drops in claims liabilities. However, some experts say that if they go on longer, or continue to grow over time as more people obtain coverage, it’s possible that the impact could be a little more significant when it comes to reducing their annual contributions toward their auto insurance plans.

    Of course, simply being able to save consumers money isn’t the only part of an insurance agent’s job. In fact, some studies show that it’s actually secondary when it comes to keeping customers satisfied. Instead, it might be more important for them to be able to provide high-quality customer service, because most consumers actually say this is more likely to make them stick with their current providers than a slightly lower monthly cost.

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