Car insurancein Michigan is notoriously expensive. The average annual premium is $2,878, 90% higher than the national average.
The reasons for this are straightforward: there are a large number of uninsured drivers, a large amount of insurance fraud, and a higher than average number of claims. Michigan’s insurers hike their rates to ensure they remain profitable despite these risks.
It is little surprise that scam artists look to exploit customers’ needs for
cheap Michigan car insurance. But as one scammer has just found out, selling fake insurance policies to desperate motorists is a serious offense.
Ridiculously cheap car insurance too good to be true
Anthony Johnson, a 30-year-old Michigan man, was caught selling fake car insurance policies on Facebook. He had claimed the policies were backed by 21st Century Insurance Company and was offering rates as low as $150 for six-month coverage, and a 12-month policy for $200.
In reality, Johnson has never been licensed to sell insurance in Michigan, and 21st Century’s name was being used without their knowledge. The policies were completely phony.
Johnson has pleaded guilty to one count of using a computer to commit a crime, a seven-year felony, and one count of insurance fraudulent acts, a four-year felony. He will be sentenced on August 20.
What can Michigan do to combat car insurance scams?
While this scam has been busted, Michigan has struggled to defeat an underlying cause of insurance fraud and uninsured motorists—sky-high insurance costs.
It is hoped that some recent changes to
Michigan’s car insurance lawswill help to lower premiums, and make scam offers less appealing to law-abiding drivers.
Michigan’s new law, which came into effect on July 1, 2020, aims to provide cheaper insurance options, and there will be no penalties for uninsured drivers who seek coverage before next year.
It remains to be seen what real world impact these changes will have on premiums, and whether it is enough to reduce instances of car insurance fraud.
Save on Michigan car insurance, legally, with Jerry
A licensed broker that offers end-to-end support, the free Jerry app gathers affordable quotes, helps you switch plans, and even cancels your old policy for you.
Unlike the fraudulent policies being offered on Facebook, we can’t promise annual premiums of $200, but drivers in Michigan save an average of $1,183 a year when they switch to Jerry.