Insurance/Finance

Overview Of Auto Insurance In Michigan

Michigan auto insurance has layers of complexity that can make even the most savvy auto insurance shopper break down. Drivers also have to cope with some of the highest auto insurance rates in the nation. But don’t let that stop you from finding the most competitive prices. Michigan has the second-highest average car insurance rates, sitting at about $1,359 per year.

In efforts to lower car insurance rates, Michigan’s auto insurance laws underwent a no-fault reform in 2020. Most drivers are expected to receive a $400 insurance premium refund in 2022, and that may be a big help to drivers in Michigan, one of the most expensive states in the country for car insurance.

Our Recommended Car Insurance and the New Auto No-Fault Law

The state’s minimum car insurance requirements include personal injury protection, property protection, and residual liability insurance. The average cost of car insurance in Michigan is $948 per year for minimum coverage and $2,309 per year for full coverage, which is higher than the national average. But while minimum coverage might be a cheaper option, it provides less financial protection and could leave you with higher out-of-pocket costs if you get into an accident. Minimum coverage car insurance for drivers refers to a policy that only meets Michigan’s state-required coverage and limits. While minimum coverage can help you get the cheapest rates, most insurance professionals recommend that you purchase higher limits for greater financial protection.
Full coverage car insurance typically costs more than minimum coverage, but also gives you more financial protection. You’ll gain coverage for damage to your vehicle because full coverage includes both comprehensive coverage and collision coverage. While full coverage might be optional for some drivers, it’s usually required if you finance or lease your vehicle.

Michigan’s top-rated car insurance providers include State Farm, GEICO, Progressive, and Auto-Owners Insurance.

When it comes to Michigan auto insurance, the state has many claims to fame. Michigan’s largest and most populated city, Detroit, goes by the nickname “Motor City” and is home to the “Big Three” automobile manufacturers: General Motors, Ford Motor Co., and Fiat Chrysler.

Despite its auto-friendly reputation, Michigan consistently has some of the highest car insurance rates in the country.
Finding the cheapest auto insurance in Michigan may take a bit of research, but it is worth the effort. Knowing the average cost of car insurance from several carriers might help you understand if your premium is competitive. Although price is the primary concern for many Michigan drivers, we also evaluated each company’s available coverage options, discounts and third-party customer satisfaction scores.

Best Car Insurance in Michigan - YouTube

Minimum coverage requirements for Michigan drivers

Like drivers in most states, Michigan drivers are required to carry at least a minimum amount of car insurance. To register your vehicle with the state’s department of motor vehicles (DMV), you must show proof that you purchased at least the minimum amount of coverage, which is 50/100/10:

$50,000 bodily injury liability per person
$100,000 bodily injury liability per accident
$10,000 property damage liability per accident (for damage in other states)
Michigan policies default to 250/500/10 coverage, so you will need to select lower limits if you want to purchase minimum coverage.

Additionally, Michigan is a no-fault state, which means drivers have to carry personal injury protection (PIP) coverage. If you are in an accident, personal injury protection will pay for your medical expenses and lost wages, as well as the same costs for any passengers you have, up to your coverage limits, regardless of who caused the accident. As a result of auto insurance reform implemented in 2020, Michigan drivers can choose from six options for personal injury protection insurance. Drivers are also required to purchase property protection insurance (PPI), which applies to damage caused to other people’s property within Michigan, like fences or buildings, up to $1 million.

Michigan Car Insurance | The General Insurance

If you want to save money on car insurance, you may be tempted to purchase minimum coverage. While minimum coverage is often a cheaper option, most insurance professionals advise that you purchase higher liability limits if you can afford them so that you are financially protected from significant losses. Minimum coverage also does not provide any coverage for damage to your vehicle, including collisions, storm damage and theft. For that, you will need full coverage. You may even be required to purchase full coverage if you have a loan or lease on your car.

Events that can impact your premium in Michigan

Car insurance rates aren’t static; they can change based on your current circumstances. You might want to consider shopping around for coverage if your rate has recently changed because you:

Received a speeding ticket: Speeding tickets are typically a red flag for auto insurers that your driving habits aren’t safe. If you get a speeding ticket, you can expect your rates to be higher for the next three to five years. The amount of the premium increase you incur will depend on the specifics of your ticket; you will likely see a more significant increase the faster you were going over the speed limit.

Added a teen driver: Teens pay some of the highest average rates of any age group due to their inexperience. Adding a teen driver could skyrocket your insurance costs, so you might want to check around for companies that are cheaper for teens. You can also take advantage of teen discounts, like savings for good students and those who participate in teen driver safety programs.

Were deemed a high-risk driver: Several scenarios can result in you being considered a high-risk driver. Having multiple accidents, several tickets or a DUI conviction — or a combination of these — can mean you are a greater risk to an insurance company. Not all auto insurers will write policies for high-risk drivers, so you might have limited options for cheap car insurance in Michigan. Doing more research and getting quotes from companies that tailor their coverage to non-standard drivers might help you find more affordable rates.

Were involved in an at-fault accident: If you cause one accident, insurance companies worry that you’ll cause more. Because of the change in your perceived risk level, you’ll likely be charged more for coverage for three to five years. If you have a clean driving record at the time of your accident and you have an accident forgiveness feature on your insurance policy, you might avoid this surcharge.

Here is how to find affordable auto insurance in Michigan

Average car insurance premiums in Michigan are some of the highest in the country, but there are ways to find cheap rates. Once you have a cheap policy, you can also work toward keeping your rates low with these tips:

Shop around: Car insurance companies all have different average rates. Shopping around can help you find the company that can offer the cheapest rate for the coverage you need. The Insurance Information Institute (Triple-I) recommends you get a minimum of three quotes to compare coverage and costs.
Keep a clean driving record: Drivers with clean driving records avoid surcharges that can increase policy premiums. Avoiding accidents, tickets and DUI convictions can help you keep your premium low.

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