Auto Insurance In Michigan: Who's Covered?

Michigan is one of the most expensive states in the US for car insurance, with drivers paying an average of $1,920 per year, or roughly 25% more than the national average. The state ranks fifth in the nation for the highest percentage of uninsured drivers, which contributes to higher premiums for insured drivers.

In 2024, the average cost of car insurance in Michigan was $1,924 per year for full coverage and $856 per year for state minimum coverage. The cost of car insurance in Michigan is influenced by various factors, including age, location, driving record, vehicle type, and credit score.

In recent years, the state has seen efforts to lower insurance costs, with Governor Whitmer signing bipartisan auto no-fault legislation to reduce expenses for Michigan drivers, maintain the highest coverage options in the country, and strengthen consumer protections.

Average cost of auto insurance in Michigan

The average cost of auto insurance in Michigan varies depending on the level of coverage. For 2024, the average annual cost of car insurance in Michigan is $872 for minimum coverage and $2,887 for full coverage. This equates to an average monthly rate of $73 for minimum coverage and $241 for full coverage.

However, these figures can vary depending on several factors, such as age, driving record, vehicle type, and location within the state. For example, the average cost of car insurance for a 16-year-old driver in Michigan is $12,921 per year for full coverage, while a 35-year-old driver with good credit and a clean driving record may pay around $1,360 per year for minimum coverage or $3,643 per year for full coverage.

Additionally, the cost of car insurance in Michigan can also be affected by driving history. Drivers with a speeding ticket, an at-fault accident, or a DUI on their record will typically pay higher rates. For instance, the average cost of car insurance in Michigan for a driver with one speeding ticket is $5,606 per year, while a driver with a DUI on their record may pay around $8,260 per year.

When compared to the national average, car insurance in Michigan is more expensive. Full coverage car insurance in Michigan costs 27% more than the national average, while minimum coverage costs 40% more.

Factors influencing auto insurance rates in Michigan

Several factors influence auto insurance rates in Michigan. Here are some of the key components:

Location

The location where a person resides is a significant factor in determining auto insurance rates in Michigan. The state, as well as the ZIP code, are taken into account. Insurers consider factors such as the frequency of car accidents, car theft and vandalism rates, claims rate, weather conditions, and the prevalence of uninsured drivers within a specific area. Michigan law prohibits the use of ZIP codes in setting automobile insurance rates.

Driving History and Experience

An individual's driving history and years of driving experience play a crucial role in insurance rates. Insurance companies examine records for accidents, tickets, and moving violations. Inexperience is seen as a greater risk, while more experience is generally associated with lower rates.

Vehicle Characteristics

The make and model of a vehicle are considered when determining insurance rates. Insurers assess the safety rating, size, age, and likelihood of theft for a particular car. Additionally, the cost of replacement parts and the presence of safety features, such as collision-warning systems, can influence the insurance rate.

Insurance Coverage and Deductible Levels

The amount of insurance coverage sought and the deductible levels chosen impact the insurance rate. Higher coverage and lower deductibles result in higher premiums. This is because insurers anticipate higher payouts in the event of a claim.

Personal Factors

Insurers consider personal factors such as age, gender, and marital status. Statistics indicate that drivers of different ages and genders pose varying levels of risk. For example, teen drivers are more likely to drive recklessly and be involved in crashes. However, it is important to note that Michigan is among the states that prohibit the use of gender as a factor in setting insurance rates.

Other personal factors include credit score and profession. A person's credit score and occupation can influence their insurance rate, as insurers may perceive varying levels of risk based on these factors. However, Michigan law prohibits the use of an individual's occupation as a basis for setting auto insurance rates.

While these are some of the primary factors influencing auto insurance rates in Michigan, it is worth noting that each insurance company may have its own specific criteria and weightage for these factors.

Minimum auto insurance requirements in Michigan

Michigan has some of the most comprehensive car insurance laws in the country, and it is a "no-fault" state. This means that if an accident happens, your insurance pays for the damage, regardless of who is at fault. This also means that the chances of someone suing or arguing over culpability are lessened.

To be a legal driver in Michigan, you must adhere to the state's insurance requirements, or you could face steep penalties. Here are the minimum auto insurance requirements in Michigan:

Minimum Liability Coverage: 50/100/10

This means that the minimum coverage includes $50,000 for bodily injury per person, $100,000 for bodily injury per accident, and $10,000 for property damage per accident. This is the minimum coverage required by law, and it is important to note that this may not be enough to cover all expenses in the event of an accident.

Personal Injury Protection (PIP)

This provides what are known as "No-Fault PIP Benefits." If you are injured in an auto accident, PIP benefits provide reimbursement for medical expenses, a percentage of lost wages, attendant care (in-home nursing services), and replacement services (help with household duties). The amount you choose is the total available for all injuries. For example, if you choose unlimited PIP coverage, you can expect unlimited coverage for your injuries.

Property Protection Insurance (PPI)

This coverage is mandatory and provides coverage for damage caused to "tangible property," such as parked cars, buildings, fences, trees, and lawns within the state of Michigan. The minimum requirement is $1,000,000 of PPI coverage.

Residual Bodily Injury Liability (BI)

This coverage protects you if you cause an auto accident that results in serious injuries to someone else. The law requires a minimum of $250,000 per person and $500,000 per accident in bodily injury liability coverage. However, drivers may opt for lower limits of $50,000 and $100,000, respectively. It is recommended that you carry at least $500,000 per person and $1,000,000 per accident to be fully protected.

Property Damage (PD)

This coverage protects you if you cause damage to another person's vehicle outside of Michigan. The minimum requirement is $10,000 of PD coverage, but it is recommended that you carry at least $100,000, especially if you travel to other states.

While these are the state-mandated minimum coverage requirements, it is important to note that they may not provide sufficient protection in all cases. Adding additional coverage or increasing your current limits is recommended to further protect yourself and your assets.

Cheapest auto insurance companies in Michigan

Michigan is one of the most expensive states in the U.S. when it comes to car insurance. The average annual rate for car insurance in Michigan is $1,920, which is 25% more than the national average. The state ranks fifth in the nation for the highest percentage of uninsured drivers, which leads to more expensive premiums for insured drivers.

Geico

Geico has the lowest sample rates in Michigan, with an average annual rate of $1,066. The company also offers a variety of discounts, such as the Good Student Discount, Multi-Car Discount, and the Five-Year Accident-Free "Good Driver" Discount.

Auto-Owners Insurance

Auto-Owners Insurance is another affordable option for Michigan drivers, with competitive rates for various driver profiles. The company also offers bundling discounts for customers who insure multiple vehicles or have multiple policies with them.

USAA

USAA offers the cheapest rates for drivers with a speeding ticket, accident, or DUI on their record. However, USAA policies are only available to military members, veterans, and their families.

Progressive

Progressive is another company that offers affordable rates for drivers with a DUI on their record. They also provide various discounts, such as the Good Student Discount and the Multi-Policy Discount.

Farmers Insurance

Farmers Insurance is known for having low rates, but some customers have reported issues with their service. It is important to consider not only the cost of insurance but also the quality of coverage and customer service when choosing a provider.

It is worth noting that insurance rates can vary significantly depending on individual factors such as age, location, driving history, and the type of vehicle. It is always a good idea to shop around and compare quotes from multiple companies to find the best rate for your specific needs.

How to save money on auto insurance in Michigan

Auto insurance in Michigan is more expensive than in most other states. The average cost of auto insurance in Michigan is almost 90% higher than the national average. However, there are several ways to save money on auto insurance in the state. Here are some tips to help you get started:

Shop Around and Compare Rates

It is always a good idea to compare rates from multiple insurance companies before choosing a policy. By shopping around, you can find the best rates and coverage options that fit your needs. Working with an independent insurance agency that quotes rates from multiple companies can be helpful.

Ask for Higher Deductibles

Opting for a higher deductible can lower your premium rates. Insurance companies tend to view drivers who choose higher deductibles as more responsible, which can result in lower premiums. However, it is important to ensure that you can afford to pay the higher deductible in the event of an accident.

Maintain a Good Credit Score

Although insurance companies in Michigan are not allowed to use credit scores to determine premiums, having a good credit score can still be beneficial when shopping for insurance. Insurance companies may offer lower rates to drivers with good credit, even if it is not explicitly stated.

Take Advantage of Discounts

Many insurance companies offer a variety of discounts that can help lower your premium. These may include discounts for safe driving, being a good student, bundling policies, or having certain safety features on your vehicle. Be sure to ask your insurance company about any available discounts that you may be eligible for.

Choose the Right Coverage Limits

Michigan requires drivers to carry a minimum amount of insurance, including personal injury protection, property protection insurance, and residual bodily injury and property damage liability. However, you can save money by choosing lower coverage limits. Just be sure that you have enough coverage to protect yourself financially in the event of an accident.

Consider Dropping Comprehensive or Collision Coverage on Older Cars

If you have an older car, it may not be worth keeping comprehensive or collision coverage. These types of coverage can be expensive, and if the value of your car is low, the cost of repairs may not justify the high premiums.

Increase Your Deductible

Increasing your deductible can lower your premium rates. Just be sure that you can afford to pay the higher deductible in the event of a claim.

Compare Quotes Before Buying a Car

The make, model, and age of your vehicle can significantly impact your insurance rates. By comparing quotes before purchasing a car, you can make an informed decision and choose a vehicle that will help keep your insurance costs down.

Practice Safe Driving

Maintaining a clean driving record is one of the best ways to keep your insurance costs low. Avoid speeding, driving recklessly, or engaging in other risky behaviours that could lead to accidents or violations.

Bundle Your Insurance Policies

If you have multiple insurance policies, such as home, renters, or life insurance, consider bundling them with the same company. Insurance companies often offer discounts to customers who have multiple policies with them.

Take a Defensive Driving Course

Completing a defensive driving course can help lower your insurance rates. Insurance companies view drivers who have taken these courses as safer and more responsible, which can result in lower premiums.

By following these tips, you can save money on your auto insurance in Michigan. Remember to compare rates, ask for discounts, and choose the coverage options that best fit your needs and budget.

Frequently asked questions