Auto insurance rates likely to increase from repealed tax break - WNEM TV 5

Auto insurance rates likely to increase from repealed tax break

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GENESEE COUNTY, MI (WNEM) -

Michigan drivers, who are already plagued with the highest auto insurance rates in the country, could see a jump in their premiums this fall.

A tax break on the books for the last four years will end when the new budget year begins and millions of Michigan drivers will feel the pinch.

In October, nearly a third of Michigan drivers will see their rates go up by an average of $40 per covered vehicle. That's because of a tax break state-based insurance companies received was repealed in the new state budget.

Drivers like Andy Konwiak wish it weren't so.

"Would prefer they had found another way to have helped balance the budget or whatever they did with that," he said.

The repeal of that tax break leaves an $80 million gap in the state budget that has since been filled by state lawmakers. And people we talked to said they understand if they have to pay a little more.

"Somebody's going to pay the cost. We're all going to pay the cost somewhere," said Dan Iott.

The Insurance Institute of Michigan opposes the real of the tax break.

In a statement they said they're disappointed in the governor and the legislature.

"The elimination of this tax credit results in an $80 million tax increase on Michigan-based auto insurance companies. This unavoidable tax increase unfortunately will be passed on to those companies' auto insurance consumers in the form of higher premiums," the statement said.

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