Auto Insurance In Michigan: How Much?

Auto insurance in Michigan is among the most expensive in the United States. The average cost of car insurance in Michigan is $2,947 per year for full coverage, far more than the national average of $2,311 per year. Michigan residents also pay more for minimum coverage car insurance at $907 per year versus the national average of $640 per year. Michigan drivers also pay more than drivers in surrounding states, with Indiana enjoying an average full coverage premium of $1,686 per year and Illinois drivers paying an average of $2,087 per year for full coverage.

The cheapest car insurance in Michigan is from USAA at $1,918 per year for full-coverage protection and $383 per year for a minimum liability policy.

Michigan's auto insurance rates compared to other states

Michigan is one of the most expensive states in the U.S. for car insurance. The average cost of car insurance in Michigan is $907 for state-mandated minimum coverage and $2,947 for full coverage. This is about 42% and 28% more than the national average, respectively.

Michigan's auto insurance rates are higher than those of many other states. For example, Wyoming, the state with the cheapest full coverage car insurance, has an average annual rate of $972, while Maine, the state with the cheapest overall car insurance, has an average annual rate of $1,175. In comparison, Michigan's average annual rate for full coverage is $2,947, and its average annual rate for minimum coverage is $907.

There are several reasons why Michigan's auto insurance rates are higher than those of other states. One reason is that Michigan requires high levels of liability and personal injury protection (PIP) coverage. Another factor is the state's extreme cold weather, which can increase the cost of repairs and claims. In addition, Michigan has a high rate of property crime, which can also drive up insurance premiums.

It's worth noting that auto insurance rates can vary within Michigan as well. For example, drivers in urban areas like Detroit and Flint tend to pay higher premiums than those in other parts of the state. Additionally, Michigan's auto insurance rates have been changing due to recent changes in the state's insurance laws. In 2020, Michigan transitioned from a system of unlimited PIP coverage to one that allows drivers to choose from several coverage levels or opt out completely. This change was intended to lower insurance premiums for Michigan drivers.

Factors that affect auto insurance rates in Michigan

There are several factors that affect auto insurance rates in Michigan. Here are the key considerations:

Location

The location of the insured person is a significant factor in determining insurance rates in Michigan. Insurers take into account the frequency of car accidents, car theft and vandalism rates, claims rate, weather conditions, and the prevalence of uninsured drivers within the specific ZIP code or area. Detroit, for instance, is the most expensive city for car insurance in Michigan and the entire United States due to its high population and urban density, leading to increased chances of accidents and insurance claims.

Driving Experience and History

The number of years a person has been driving plays a crucial role in insurance rates. Inexperience is considered a higher risk, while more experience is seen as a mitigating factor. Insurance companies scrutinize a person's driving history, including accidents (both at-fault and non-at-fault), tickets, and moving violations. Younger drivers, especially teenagers, are deemed more likely to cause accidents or engage in reckless driving behaviour, resulting in higher insurance rates.

Vehicle Characteristics

The make, model, age, safety rating, and size of the vehicle are all taken into account. Insurers assess the likelihood of the vehicle being involved in a crash and the potential cost of replacement parts. Additionally, vehicles with higher theft rates, expensive repairs, and poor safety ratings may contribute to higher insurance premiums.

Personal Characteristics

Insurers also consider personal factors such as age, gender, marital status, and credit score. Age is a critical factor, with younger drivers often facing higher rates due to their lack of driving experience. In Michigan, gender is not permitted to influence insurance rates. Marital status can impact rates, with married couples sometimes receiving lower rates due to perceived lower risk. Credit score can also be a factor, as those with lower scores may be deemed more likely to file claims. However, Michigan prohibits the use of credit scores in setting premium rates.

Insurance Coverage and Deductibles

The level of insurance coverage and deductible amounts also affect insurance rates. Higher coverage limits and lower deductibles typically lead to higher premiums, as the insurer assumes more risk.

Insurance Company

Different insurance companies may weigh these factors differently, so it is essential to compare rates and find the most suitable provider.

Average cost of auto insurance in Michigan

The average cost of auto insurance in Michigan is $2,947 per year for full coverage and $907 per year for minimum coverage. These rates are far higher than the national average, which is $2,311 per year for full coverage and $640 per year for minimum coverage. Michigan drivers also pay more than drivers in surrounding states, with Indiana enjoying an average full coverage premium of $1,686 per year and Illinois drivers paying an average of $2,087 per year for full coverage.

The average cost of auto insurance in Michigan was $2,639 in 2021, according to thezebra.com, and $2,610 in 2022. In 2024, the average cost of auto insurance in Michigan is expected to be $2,947.

The high cost of auto insurance in Michigan is due in part to the state's no-fault system and high-limit insurance requirements. Michigan is also a state with harsh winter weather and a high rate of uninsured motorists, which can contribute to more accidents and higher rates. In addition, Michigan requires drivers to carry personal injury protection (PIP) coverage, which can increase the cost of insurance.

The cost of auto insurance in Michigan can vary depending on factors such as age, driving history, and location. For example, young drivers in Michigan can expect to pay significantly more for car insurance than older adults. The average cost of car insurance for a 16-year-old driver in Michigan is $10,300 per year, while the average cost for a driver in their 50s is $2,296 per year.

The cheapest car insurance in Michigan is offered by USAA, with an average annual rate of $1,918 for full coverage and $383 for minimum liability coverage. However, USAA is only available to military members and their families. For those who are not eligible for USAA coverage, Progressive offers the next cheapest rates, with an average annual rate of $2,209 for full coverage.

Cheapest auto insurance companies in Michigan

Michigan has some of the most expensive car insurance rates in the US. The average cost of full-coverage car insurance in Michigan is $3,643 per year or $304 per month. This is about 81% more than the national average of $2,008 per year.

The cheapest car insurance companies in Michigan are:

• USAA
• Progressive
• Auto-Owners Insurance
• Michigan Farm Bureau
• Frankenmuth Insurance
• Geico
• Chubb
• Travelers
• Secura
• Wolverine Mutual
• Pioneer State Mutual

USAA is the cheapest option for full-coverage car insurance in Michigan, at $1,918 per year or $160 per month. However, USAA is only available to military members and their families. For those who are not affiliated with the military, Progressive is the cheapest option, at $2,209 per year or $184 per month.

The cheapest option for minimum-coverage car insurance in Michigan is Auto-Owners, at $528 per year or $44 per month.

It's important to note that car insurance rates are highly dependent on individual circumstances, such as age, location, driving history, and type of vehicle. Therefore, it's recommended to compare quotes from multiple providers to find the best deal.

Michigan's auto insurance laws

Personal Injury Protection (PIP)

PIP provides "No-Fault PIP Benefits" that reimburse medical expenses, a percentage of lost wages, and in-home nursing and household services. The new auto insurance law introduced a tiered system for PIP coverage, with options ranging from $50,000 to $500,000, or no limit. The recommended option is the No Limit PIP option, which is closest to the previous law and covers all reasonable expenses for care, recovery, and rehabilitation.

Property Protection Insurance (PPI)

PPI is mandatory and covers damage to "tangible property" such as parked cars, buildings, fences, trees, and lawns within Michigan. Every auto policy in the state includes a mandatory $1 million of PPI coverage.

Residual Bodily Injury Liability (BI)

BI coverage is required by law and protects drivers financially in the event they cause an accident that results in serious injuries to another person. The minimum coverage limits are $250,000 per person and $500,000 per accident. However, drivers can choose lower limits of $50,000 and $100,000, or higher coverage of $500,000 per person and $1 million per accident, as recommended by attorneys.

Property Damage (PD)

PD coverage is required by Michigan law and protects drivers financially if they cause damage to another person's vehicle outside the state. The minimum PD coverage required is $10,000, but attorneys recommend carrying a minimum of $100,000.

Uninsured Motorist & Underinsured Motorist Coverage

This coverage is not mandatory but provides protection for anyone hit by a driver without insurance or with insufficient insurance. It is recommended that motorists purchase as much Uninsured Motorist and Underinsured Motorist Coverage as they can afford.

Other Considerations

The new auto insurance law in Michigan also introduced a Managed Care Option, which allows insurance companies to mandate limitations on doctor and treatment options. Additionally, motorists can select a Coordination of Benefits Option, which has deductibles and exclusions related to other health and accident coverage.

Frequently asked questions