When it comes to your car insurance premiums, there are some factors you can control — but sadly, unless you want to move, the state you’re living in is not one of them. Not every state is created equal when it comes to auto insurance, and Michigan drivers are routinely saddled with some of the highest car insurance rates in the country.
Each year, insure.com releases a list of the most expensive car insurance premiums by state, and until very recently, Michigan rarely dropped below third place.
Though the price Michigan drivers pay for insurance have dropped since 2019, they still rank among the highest in the country, making one wonder if it’s even possible to get cheap Michigan car insurance.
The Most and Least Expensive Car Insurance in Michigan
So how bad is the insurance situation in Michigan? Let’s look at some numbers from The Zebra’s Ross Martin. The average yearly premium for Michigan drivers is $2,639 per year — a full 73% higher than the U.S. national average. Historically, Michigan has ranked as the 2nd most expensive state in the nation when it comes to car insurance. The cheapest full coverage comes from Geico, which offers a $1,061 yearly premium — just a bit below the national average.
But that’s far removed from what Michigan drivers can expect to pay, especially in Detroit. In the Motor City, drivers will pay up to a whopping $4,726 in yearly premiums. According to Martin, the cheapest city for car insurance is St. Joseph — but most cities in Michigan, such as Grand Rapids and Lansing, will cost you $1.900-$2.000 a year.
So, what makes car insurance in Michigan so expensive? Many factors.
When determining car insurance rates, underwriters look at a number of factors, such as demographics, driving record, credit rating, and so on — but they also look at where you live, and what risks come with living there. In a place prone to certain natural disasters, for example, claims against those disasters will cost more to insure, because the insurance company itself has to pay far more in compensation.
In Michigan, there is a no-fault law, which will provide unlimited lifetime medical care for drivers involved in crashes. Every driver pays a $170 per-vehicle fee for this service, which is in turn reimbursed to drivers who have medical expenses exceeding $555,000. Additionally, because Michigan is a no-fault state, drivers must have personal injury protection (PIP), which will cover expenses for an accident regardless of who is at fault.
Michigan’s insurance costs are also driven up by the number of uninsured drivers on the road. Over 1 in 4 drivers on the road in Michigan are without car insurance — that’s 13% higher than the U.S. average. Uninsured drivers drive up costs because the other party’s insurance has to cover everything.
Other legal complications include the high cost of personal injury lawsuits in Michigan, which rose by 130% in the last decade, and the short processing time for claims, which Michigan law requires be processed within 30 days.
Another reason for the high cost of insuring a car in Michigan is the relatively high crime rate. Crime tends to be higher in urban areas, and incidents like vandalism, car theft, and theft of catalytic converters all lead to insurance claims, which means higher premiums for customers.
How Michigan Drivers Can Lower Car Insurance Rates
High insurance premiums can be difficult to deal with and can even contribute to the problem of uninsured drivers, many of whom go without insurance simply because they can’t afford the premiums. So, what can a Michigan driver do to try to bring those insurance rates down? Here are a few tried-and-true tips for reducing those premiums:
- Shop around and compare insurance rates. There are free online tools like TheZebra.com, so you can easily compare insurance companies to find the best cheap car insurance in Michigan, and you could potentially get better coverage for less money.
- Ask your existing insurer for discounts. Insurance companies offer a variety of discounts, not just for a clean driving record, but discounts for good grades, working in health care, veteran’s discounts, being a teacher, and more. The average insurance company has dozens of discounts available — find out what’s available for you!
- If you have home insurance with the same company, look into bundling your car and home insurance together. This will often result in a discount.
- Maintain a clean driving record and a high credit score. Though the practice is falling out of fashion, credit rating information is still used as a factor in many states when determining your auto insurance rates.
- Install anti-theft or safety devices on your vehicle, and / or take a defensive driving course.