Auto insurance is one of those living expenses that you can’t do without. It’s mandatory by law in almost every state in the US, and not having it is inviting potential financial disaster. But in a tough economy, it can be tough to make ends meet. Navigating the world of Michigan car insurance can be complex. This guide aims to simplify the process. We’ll cover everything from finding the best rates to understanding your coverage options.
This is particularly true if you’re a motorist in Michigan, where car insurance is particularly high. So how bad is it, and what can you do about it?
What We Will Cover
How Much Do Michigan Drivers Pay?
If you’re driving in Michigan, chances are you’re paying much more for your auto insurance than the national average. Ross Martin at The Zebra has some numbers: the average driver in Michigan pays $2,269 per year, a full 73% higher than the national average. of around $1,400. Some factors may bring this number higher or lower, such as driving record, age, marital status, and credit rating.
You may also find lower rates depending on the insurance company you choose to work with. For example, if you buy insurance from GEICO or USAA in Michigan, your rates might even be lower than the natural average, whereas if you buy from State Farm, you could end up paying $2,600 or more in premiums.
To calculate your rate increase use this handy percentage increase calculator.
Why Is Michigan Car Insurance So High?
The good news is Michigan has some of the best coverage in the country for people injured in car crashes. But the premiums have become almost prohibitively expensive. Why? Because until July 2020, drivers in Michigan were required to buy unlimited Personal Injury Protection (PIP) along with their car insurance. PIP has a lot of benefits for drivers who have been in accidents: it covers lost wages, specialized medical treatment, in-home nursing care, and more.
But such a high level of coverage had some expensive consequences, including fraud, legal battles, and disproportionately costly medical claims. In order to deal with these additional expenses, insurance companies eventually raised their rates — which almost doubled the percentage of income Michigan drivers were paying on their auto insurance.
Ironically, PIP was intended to reduce how much drivers were intended to bring premiums down, not raise them to record highs. Fortunately, some changes are coming that may provide relief to Michigan drivers.
Michigan Car Insurance Laws
Fortunately, recent changes have made the outlook for Michigan drivers a bit more positive. A few recent changes in Michigan driving law include:
- The option for drivers to take varying levels of PIP coverage, rather than a one-size-fits-all requirement of unlimited PIP. Drivers can choose to take $50,000, $250,000, or $500,000 in PIP coverage. – Drivers can also opt out of PIP entirely if they happen to have Medicare or other qualifying health insurance plan.
- The state has also banned the use of certain information when pricing out auto insurance. These include your car’s make and model, the mileage, credit history, and education, among others. While underwriters find this information useful in accurately assessing premiums, Michigan lawmakers feel this is unfair to drivers.
These new laws and changes aren’t guaranteed to provide savings for every driver in Michigan, but it should hopefully work toward bringing Michigan’s high auto premiums down.
How to Manage High Auto Insurance Premiums
With the price of Michigan auto insurance currently so high, some drivers may be tempted to let their coverage lapse. While the short-term savings might provide some relief, the long-term risks are considerable. Not having collision or medical coverage could lead to massive medical bills and even medical bankruptcy — and not having liability insurance could lead to even more dire financial consequences if you’re in an at-fault accident and have to pay out of pocket for not only your expenses, but the other parties as well.
Rather than drop your auto insurance coverage, consider some of the following strategies:
- Shop around and compare quotes to try to find the best cheap car insurance in Michigan. There is a wealth of online tools you can use to compare car insurance quotes and find the best value.
- Ask your insurance company about possible discounts. The average insurer offers an average of 50 or more discounts for various criteria, including discounts for low mileage, good driving record, working in certain occupations (such as teachers or health care workers), veterans’ discounts, and more. Talk to your insurance company and find out what you may qualify for.
- Take a defensive driving course — not only will it provide you with safety benefits, but your insurer will likely offer you a discount.
- Install additional anti-theft devices or safety equipment on your car. Keep in mind that accidents and collisions are not the only things that lead to auto insurance claims — car theft and vandalism are also leading causes for insurance claims, so taking additional precautions may earn you a discount from your insurer.
FAQs On Car Insurance In Michigan
What factors affect Michigan car insurance rates?
Several factors like age, driving history, and location can influence your insurance rates in Michigan.
Is Michigan a no-fault insurance state?
Yes, Michigan operates under a no-fault insurance system.
How can I find the best Michigan car insurance quotes?
Comparing quotes from multiple providers is the best way to find affordable rates.
Insurance Companies Licensed to Operate in Michigan
Navigating the landscape of auto insurance in Michigan can be a complex task with numerous options to consider. The following table provides a comprehensive list of insurance companies licensed to operate in the state, along with their special features and locations. Whether you’re a new driver or looking to switch providers, this table aims to simplify your decision-making process.
Table of Auto Insurance Companies Licensed to Operate in Michigan
|Special Features or Programs
|Location of Headquarters
|No Dependent Discount, Wage Loss Waiver
|Multiple locations in Michigan
|AAA/Michigan Auto Club
|Membership benefits, Roadside Assistance
|Membership fee required
|Name Your Price tool, Snapshot program
|Livonia and Sterling Heights, MI
|Drivewise and Star Driver apps
|Multiple locations in Michigan
|Platinum Auto plans, Connections Auto plan
|Howell, Grand Rapids, and Maccabees Center, MI
|Farm Bureau Insurance of Michigan
|Community partnerships, Car rentals, Prescription drugs, Hotel stays
|Geared toward educators
|Offered to educational institutions
|Online-based, No agents in Michigan
|Military Installation Discount, Family Discount
|For military members, veterans, and their families
|No Problem Claim Service
|Youthful Driver discount, Farmers Inner Circle
|Pioneer State Mutual
|Discounts to organizations, employers, and alumni groups
|Alumni groups and Greek organizations discounts
|Detroit, Warren, Sterling Heights, Ann Arbor, and Grand Rapids, MI
|175 independent agencies
|Operates only in Michigan
|Michigan Insurance Company
|Member of the Donegal Insurance Group
|TrueLane program, AARP members discounts
|For drivers unable to purchase from traditional insurers
|Michigan’s residual pool
|CustomFit Auto Program, Prime of Life feature
|Depends on independent agents
|Operates only in Indiana and Michigan
|Community Commitment Program, Sustainability Committee
|Headquartered in Wisconsin
|Philadelphia Insurance Companies
|TEAMPHLY community initiatives
|Local office in Troy, MI
|Educator Advantage program
|Exclusively serving Michigan
For a more detailed review of each company, you can visit ValuePenguin.
Final Thoughts About Michigan Car Insurance
You’ve now got the tools to make an informed decision about Michigan car insurance. Whether you’re a new driver or looking to switch providers, this guide has you covered. Thanks for reading!