Michigan is known for having the most comprehensive no-fault insurance system in the country – and some of the highest car insurance rates as well. The ZIP code 48227 in Detroit has the highest average annual rate in the U.S., at $5,109. Even a driver with a great record will pay thousands of dollars a year in many Detroit-area suburbs. Rates fall substantially in Michigan’s more rural areas.
While you don’t have a choice about whether to buy car insurance in Michigan, you do have options on how much you pay for it. We’ll show you how to be sure you are finding the cheapest car insurance in Michigan and provide average car insurance rates for your area so you can compare costs. We also explain Michigan car insurance laws.
The average car insurance rate in Michigan is $2,226 a year. The severity and frequency of claims in your neighborhood, your driving record, the type of car you drive, your credit and other variables are used by insurance companies to figure out the cost of your policy. That’s why the price for the same coverage can vary by hundreds, sometimes thousands, of dollars among insurance companies. For example, in Detroit ZIP code 48227 the highest rate among six carriers is ($6,841) is twice as much as the lowest ($3,601). That means you could overpay by $3,240 if you don’t shop around. Enter your ZIP code to see the average car insurance rate for your neighborhood. You will also see the highest and lowest rates from the six major carriers surveyed to get an idea of what the most affordable car insurance price is in your area.
|State law requires the following coverages:|
|Minimum bodily injury liability||$20,000/$40,000|
|Minimum property damage liability||$10,000|
|Property protection insurance (PPI)||$1 million|
|Personal injury protection (PIP)||Medical and work loss|
Michigan car insurance laws mandate that drivers carry minimum liability coverage limits of 20/40/10 on their vehicle.
Michigan car insurance laws also mandate that you have Property protection insurance (PPI). It is a mandatory coverage specific to Michigan. It provides up to $1 million in protection from damage to buildings, fences, poles, other inanimate objects and legally parked cars. Claims under PPI only apply to unintentional damage to other people's property, so if you run into your own fence, you'll pay out of pocket to fix it.
Personal injury protection (PIP) is also required. It is used to pay for medical expenses regardless of who is at fault. Michigan's no-fault system provides you and your family with unlimited lifetime coverage for medical expenses resulting from an auto accident, regardless of fault. And, it’s true that In Michigan, your bodily liability insurance will typically not be triggered for claims due to the pay outs that come under the no-fault PIP portion of your policy. But it’s still wise to consider buying extra car insurance coverage.
Here’s why: Under the few exceptions when your bodily injury coverage does come into play, you will only be covered up to your policy limits. If you have minimum bodily injury limits and are sued, you are responsible for paying the difference. For instance, if you kill another driver in an accident, and the family sues you for $100,000 for pain and suffering, your insurer will only pay out $20,000, leaving you to pay the remaining $80,000.
The good news is that full coverage usually isn’t that much more expensive than minimum coverage. You do pay more if you choose to get higher liability limits, comprehensive and collision coverage, but typically the extra protection is worth the relatively small increase you pay for the best car insurance in Michigan.
Increasing your insurance from the state minimum to full coverage with a $1,000 deductible costs, on average, $762 more, or $64 a month. Boosting liability limits without getting optional coverages may even lower your rate, as you’ll see in the chart below. That’s because insurers in Michigan typically consider drivers carrying higher limits to be less accident-prone.
|Coverage limits||Average annual rate|
|Liability Only – state minimum||$2,446|
|Liability Only - 50/100/50 BI/PD||$2,145|
|Full Coverage - 100/300/100 BI/PD
$1,000 Comp/Collision deductible
|Full Coverage - 100/300/100 BI/PD
$500 Comp/Collision deductible
|Full Coverage - 100/300/100 BI/PD
$250 Comp/Collision deductible
*The table shows the average annual rate of 10 ZIP codes in the state from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for CarInsurance.com by Quadrant Information Services.
If you have few assets or you have an old car, you may want to buy cheap Michigan auto insurance. But keep in mind that even a minor accident will typically cost more than what your insurance policy will pay out if you carry just the coverage required to drive legally in your state.
Use our How Much Car Insurance Do You Need? tool to get a recommendation.
If your net worth is:
- less than $50,000, choose at least 50/100/50
- between $50,000 and $100,000, choose at least 100/300/100
- more than $100,000, choose at least 250/500/100
If you're leasing or financing your car, you must get coverage of 100/300/100 or higher.
It's important to carry collision coverage on your vehicle if it's newer or not easily replaced. This is because Michigan's no-fault PPI insurance only pays for damages to properly parked vehicles. Also, the mini-tort law only allows you to sue an at-fault driver for up to $1,000 for other types of damage.
Collision pays for damage to your car from an accident. The average yearly cost for collision coverage in Michigan is $369, according to the Insurance Information Institute, an industry trade group.
There are three basic kinds of collision insurance to choose from in Michigan:
- Broad Form collision -- pays for damages regardless of fault, with a deductible that applies only if you are substantially at fault
- Standard collision -- pays for damages regardless of fault, with a deductible that always applies.
- Limited collision -- pays only if you are not substantially at fault, and may or may not have a deductible.
Comprehensive insurance pays to replace stolen cars and for damages to your car from fire, flooding, hail, animal strikes, falling objects and vandalism. The average annual cost for comprehensive coverage in Michigan is $143, according to the III. If your car is:
- less than 10 years old, you should strongly consider buying collision and comprehensive.
- more than 10 years old, only buy collision and comprehensive if your car is worth $3,000 or more, if you couldn’t afford to replace your car if it’s wrecked, or if you just want more protection on your policy.
If you buy comp and collision, check our guide to choosing a deductible amount.
These coverages are optional in Michigan and should match the liability limits you choose. Uninsured motorist coverage and underinsured motorist coverage pays for damages if you’re hit by a driver with no insurance or a driver with coverage that’s insufficient to pay for your repairs and medical expenses.
Medical payments coverage can help pay for the medical or funeral expenses of covered drivers and passengers after an accident, regardless of fault, up to $25,000. MedPay is optional in Michigan, and because you’re required to carry PIP, MedPay isn’t a must-have. The benefits of adding MedPay are that it covers passengers who don’t have health insurance and there is no deductible
MedPay does the following:
- Covers you and your passengers’ medical expenses
- Pays for expenses after health insurance limits are exceeded
- Offers additional protection to insured drivers who are hit by a car while walking or biking
If you don’t own your car outright and have an accident, gap insurance pays the difference between the cash value of your car and the current outstanding balance on your loan or lease.
- If you’re financing your car, your car is less than one year oldandyou’ve put less than 20 percent down on it, you should buy gap insurance. If not, you don’t need gap insurance.
- If you’re leasing your car, it’s a good idea to buy gap insurance if you aren’t already required to in your lease agreement.
- If you own your car outright, you don’t need gap insurance.
Scores are based on Insure.com’s “Best Insurance Companies” customer review survey of 3,700 customers. Companies not in the top 10 of market share do not qualify. All scores are out of 100.
Best car insurance companies in Michigan
Best customer service:
- USAA -- 100
- State Farm—92
- Allstate – 91.8
- Geico – 88.7
- Progressive – 88.4
Best claims service:
- USAA – 100
- Liberty Mutual – 96
- Geico –93.9
- Progressive – 92.5
- State Farm – 91.8
Best value for the price:
- USAA – 91.3
- Progressive – 86.3
- State Farm – 84.6
- Geico – 81.1
- Liberty Mutual – 80.4
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|Rank||Company Name||Direct premiums written||Market share %||Overall Customer Review Ranking|
|1||State Farm Group||1,496,940||18.56%||90.4|
|2||Auto Club Group||1,287,045||15.96%||n/a|
|3||Progressive Insurance Group||885,241||10.98%||89.6|
|4||Auto-Owners Insurance Group||775,363||9.61%||n/a|
|5||Allstate Insurance Group||726,139||9%||87|
|6||Hanover Insurance Group||462,349||5.73%||n/a|
|7||Liberty Mutual Insurance Group||374,837||4.65%||86.4|
|8||Michigan Farm Bureau Group||365,506||4.53%||n/a|
Source: A.M. Best market share rankings are based on direct premiums written in 2015.
Customer review rankings based on Insure.com's 2016 "Best Insurance Companies" survey of 3,700 customers. Scores are out of 100.
Bodily injury liability and property damage liability – 20/40/10 – must be purchased in Michigan. But in Michigan what they cover is different compared to other states. They are referred to as residual coverage. This is because the no-fault law protects insured drivers from being sued, and covers injuries regardless of fault. So your required liability coverages usually won’t come into play. However, there are specific situations in which you can be sued. These include:
- If you cause an accident (in Michigan) in which someone is killed, seriously injured or permanently disfigured.
- If you're involved in an accident (in Michigan) with a nonresident who is an occupant of a vehicle registered outside of Michigan.
- If you're involved in an auto accident in another state.
If you’re sued for damages that exceed your liability limits, you will be responsible to pay the difference.
The "mini-tort" portion of the Michigan no-fault law establishes another situation in which you can sue or be sued. Under this provision, if you're 50 percent or more at fault in an accident and caused damage to another person's car and that vehicle is not completely covered by the owner's insurance policy, then you may have to pay up to $1,000 in damages.
This law also allows you to sue, or claim against, another driver who is 50 percent or more at fault for damage to your car if it isn't fully covered by your own insurance policy. You can receive up to $1,000 from the other party. If you have collision coverage, you're able to sue for your deductible amount (up to $1,000) from the other party.
PIP coverage in Michigan also pays, up to a limit, for wages you would have earned if you had not been hurt, for up to three years. Currently, the maximum wage loss per month under MI PIP is $5,392. PIP benefits also include coverage for rehabilitation. You additionally get paid $20 a day for up to three years to pay for household tasks and home maintenance that you can no longer do because you are injured.
Typically you will have to pay a deductible for your PIP. This is the amount you are responsible for before your insurer pays out benefits. The deductible varies by insurer, but is usually $300 or $500 for each accident.
If you are killed in an accident, your policy will pay your dependents up to the monthly amount for three years.
Legislators have long recognized that Michigan’s unique car insurance law – combining no-fault coverage and unlimited medical benefits – significantly contributes to costs, making Michigan’s rates the highest in the nation. To that end, various reform bills have been pitched over the years to rein in costs. The latest Michigan auto reform effort stalled when lawmakers, insurance companies and hospitals failed to reach an agreement on how to overhaul the existing law.
Car insurance companies in Michigan assign you insurance eligibility points for certain traffic violations. These points are used when deciding whether or not to sell you a policy. Note, however, that the eligibility points used by insurers are not the same as the points on your driving record.
You can be turned down for automobile insurance if you have 7 or more eligibility points from violations within the past three years.
Here is how Michigan car insurance companies assign eligibility points:
- Driving more than 15 mph over the speed limit (careless driving) – 4 points
- Driving 11-15 mph over the speed limit – 3 points
- Driving 15 mph or fewer over the speed limit on freeways that used to have a maximum speed limit of 70 mph – 2 points
- Other moving violations – 2 points
- The first accident in which you are more than 50 percent at fault – 3 points
- The second and subsequent accidents in which you are more than half at fault – 4 points
For a list of driver license points for infractions, visit the Secretary of State Michigan driver point system website.
If you are cited for a traffic violation, you may qualify to take a driver improvement course. If you pass, the course provider will notify the Michigan Department of State electronically. This means no points from the ticket will be tacked on to your driving record and state department will not show the ticket information to insurance companies. The ticket information (but not the points) is still placed on your record, though, and may be viewed by courts and cops.
The course costs up to $100 depending on the provider. If are eligible, you will be notified by mail about the Basic Driver Improvement Courses (BDIC) process. You may participate if you:
- You have 2 or fewer points on your record
- The violation was not in a commercial vehicle
- The violation was not a criminal offense
- The ticket you received is for 3 or fewer points, and not for a major offense such as DUI or not for careless or negligent driving
You may get a lower PIP rate if you “coordinate” your coverage with your health insurance as long as you do not have Medicaid, Medicare or a Medicare supplemental policy. If you go this route, your no-fault policy will pay your medical expenses or lost wages after you have used all the benefits under your health or disability plan. Check with your health insurance company to make sure your policy will pay for injuries related to a car accident before you try to coordinate coverage.
If you are age 65 or older, Michigan car insurance laws require insurers to offer you a discount if you drive your vehicle less than 3,000 miles a year. If you are age 60 or over with no salary from a job, you can also get a lower PIP rate by waiving coverage for work loss that is paid out under PIP. You can waive this coverage for yourself and your eligible retired spouse, but you must still carry it for other persons who may be injured in your car or by your car in an accident.
If you are convicted of speeding, your car insurance rates will go up 28 percent, on average, per year, according to an analysis of rates from six insurers for 10 ZIP codes in the state.
Category: Auto Insurance