Michigan Car Insurance: Guide to Getting Coverage at the Lowest Rates
Michigan vies with Louisiana as the state with the highest car insurance premiums in America.
While that’s a dubious distinction at best, it means getting coverage at the lowest rate is more important than ever.
But at the same time, you don’t want to compromise the coverage you need.
The purpose of car insurance is to protect you and your financial assets from claims by other drivers.
That’s why it’s important to have a balance between the premium you’ll pay and the coverage you keep.
In this guide, we’ll show you the various factors that go into determining your car insurance premium. But we’ll also provide you with strategies to keep that premium as low as possible.
What are Average Car Insurance Rates in Michigan?
Though it helps to know what the average car insurance rates are in Michigan, understand that number is no more than a starting point.
Because of the different factors that determine your car insurance premium, you probably won’t pay anything that looks like the average statewide premium.
But just as a baseline, below are statewide average premiums in Michigan for three popular car insurance coverage levels (all premium information we’ll be providing comes from CarInsurance.com):
- “Full coverage” – 100/300/100***, with comprehensive and collision coverage, including a deductible of $500: $3,141 per year
- Liability only, with 50/100/50: $1,919 per year
- Liability only, using the state minimum coverage levels: $1,855 per year
Understanding coverage levels
The first number represents bodily injury or death to one person in a single at-fault accident.
The second number represents bodily injury or death to two or more people in a single at-fault car accident.
The third number refers to property damage caused to other vehicles in an at-fault accident.
Full coverage also includes collision and comprehensive coverage, which pays for repairs to your vehicle no matter who is at fault.)
Factors that Will Affect Your Nevada Car Insurance Premium
Below are seven of the most important factors that will determine the premium you’ll pay for Michigan car insurance.
Gender
This factor is more important if you’re under 25 – but at higher ages there’s little difference if you are a man or woman.
For example, a 19-year-old woman will pay $393 per month for full coverage, while a 19-year-old man will pay $411 per month for the same policy.
Your age
The best car insurance premiums are available for drivers between the ages of 26 and 65.
If you’re under 26 or over 65, you’ll pay higher rates.
Those will be dramatically higher if you’re on the younger end of the range, and only slightly higher if you’re over 65.
For example, an 18-year-old male driver living in Lansing will pay $418 per month, or $5,096 per year, for 100/300/10 coverage. But a 30-year-old male with the same coverage will pay just $213 per month, or $2,556 per year.
A 75-year-old man with the same coverage, also living in Lansing, will pay $249 per month, or $2,988 per year. It’s only a little more than a 30-year-old male will pay for the same coverage, but it shows how car insurance premiums rise after you reach 65.
Driving History
Your driving history is the single most important factor affecting your premium level.
In fact:
Younger drivers pay higher premiums precisely because they have no driving history.
Typically, your driving record will be considered for the past three years. Violations fall off your record after that time has passed.
Based on national statistics, traffic citations can increase your car insurance premium anywhere from a low of 3% for a seat belt infraction, to as high as 79% for a DUI/DWI first offense.
Speeding no more than 15 miles over the limit will produce a 20% increase, while speeding 30 or more miles over the limit will increase your premium by 30%.
Premium increases based on at-fault accidents can have a similar effect. A typical car insurance premium in Michigan will increase by 48% after an accident claim that’s determined to be your fault.
That’s just an average, since the premium increase will vary based on the dollar amount of any property damage claim, or whether or not the accident resulted in bodily injury.
Credit history
Insurance companies have determined that credit history is a factor in calculating car insurance premiums.
This is because there is a correlation between drivers with a poor credit history and high-risk driving.
Coverage amount
Earlier we disclosed significant variations in statewide average premiums based on popular coverage limits.
Once again, a policy with liability limits of 100/300/100 is $3,141 per year.
Meanwhile, liability coverage limits of 50/100/50 drop $1,919 per year, while coverage for state minimum liability limits is $1,855 per year.
Be careful using coverage amount as a savings strategy.
Your liability limits should roughly match your net worth.
For example, if you have a net worth of $250,000, you’ll want to go for 100/300/100 coverage. If your policy limits are lower than that, you may need to come out of pocket for the difference.
The vehicle(s) you’re covering
The more expensive a vehicle is, the more it will cost to insure. Age also plays a role.
An older vehicle, such as 10 years or older will generally cost less to insure than a brand-new car. Much of the difference is due to the fact that the older vehicle may not require collision and comprehensive coverage.
But the type of vehicle is also a factor.
While sedans are generally the least expensive to insure, pickup trucks, luxury vehicles, and sports cars are the most expensive.
The insurance company
The company you purchase car insurance from is quite possibly the most underrated premium factor.
But the annual premiums between two companies providing essentially the same coverage can vary by thousands of dollars.
Below are the average statewide premiums for full coverage (100/300/100) by six major carriers operating in Michigan:
- Geico: $1,453 per year
- Progressive: $1,790 per year
- State Farm: $3,032 per year
- Allied Property & Casualt: $3,295
- Farmers: $4,728 per year
- Allstate: $6,039 per year
Notice that Allstate, the most expensive provider, charges premiums that are more than four times higher than Geico, the lowest cost provider.
Average Car Insurance Rate in Michigan Cities
Even within the same state, there can be major variations in premium levels from one city or town to another.
With the statewide average premium at $3,141 in Michigan for 100/300/100 coverage, average premiums on a local level are as follows:
- Ann Arbor: $2,643
- Dearborn: $8,128
- Detroit: $9,605
- Flint: $4,968
- Grand Rapids: $2,756
- Lansing: $2,849
- Livonia: $3,580
- Sterling Heights: $4,757
- Warren: $5,882
Detroit has the highest premiums in Michigan because it’s the state’s largest city.
But as a much smaller city, premiums and Grand Rapids are only about 30% as high as they are in Detroit.
This owes to the fact that large cities and metropolitan areas have a higher concentration of drivers, resulting in more accidents.
Auto Insurance Laws in Michigan
The following minimum coverage limits for bodily injury (liability) and property damage coverage are required for drivers in Michigan:
- $50,000 for bodily injury, for injury or death to one person in a single-car accident
- $100,000 for bodily injury, for injury or death to more than one person in a single-car accident
- $10,000 per accident for property damage
This coverage is expressed as “50/100/10”.
Michigan is one of a dozen “no-fault” states, which essentially means drivers will file claims against their own insurance companies, regardless of who is at fault in an accident.
As is typical with no-fault states, Michigan requires drivers to maintain personal injury protection (PIP) coverage for medical expenses.
You’ll have five options on the coverage limit you want:
- $50,000 maximum coverage, if a driver is enrolled in Medicaid.
- $250,000 maximum.
- $500,000 maximum.
- Unlimited lifetime coverage.
- Opt out of PIP coverage.
The last option is available only if you are on Medicare or a qualifying health insurance plan that covers auto accidents.
The PIP portion of coverage in Michigan makes up between 35% and 45% of a typical car insurance premium.
Basic Information on Optional Coverages in Michigan
As is the case in virtually every other state, there’s a wide range of optional coverages available to add to your policy in Michigan.
The most popular include:
Collision
While the personal damage portion of a car insurance policy covers the cost of repairs to the other driver’s vehicle when you are determined to be at fault, it will not cover the cost of repairs to your vehicle.
You can add collision coverage specifically for that purpose. If you have a loan or a lease on your vehicle, it will be required by your lender.
Comprehensive
This provision will cover your vehicle for damage sustained while it is parked. This concludes theft, damage from falling objects, and weather-related hazards, like storm damage.
Uninsured/under-insured motorist
Despite state laws designed to prevent it, a large number of drivers continue to operate without car insurance. Many more have only minimal coverage. This provision will protect you if you’re involved in an accident with either type of driver.
Umbrella coverage
If you need a higher level of coverage than is available with standard car insurance policies, you can take advantage of this option.
It can extend your liability protection into millions of dollars and is surprisingly inexpensive.
Other optional coverages include roadside assistance, rental car reimbursement, and towing and labor.
You should request a list of all policy options from any car insurance company you’re working with.
Tips to Get the Best Rates on Michigan Car Insurance Policies
Below are the most popular strategies to get the best rates on car insurance in Michigan:
Drive safely
There’s no single factor that will have a bigger negative impact on your car insurance premium than a poor driving history.
Do your best to avoid moving violations and at-fault accidents.
If you’re clear for at least three years, you’ll be eligible for the best rates available.
Complete a safe driver course
Insurance companies will often allow you to minimize the damage from a fair or poor driving history by completing an approved safe driver course.
Check with your insurance company to see what they offer.
Don’t maintain more liability coverage than you need
If you’re a young driver, and you have few assets, you don’t need full liability coverage. The state minimum coverage limits will be sufficient.
Take advantage discounts
Check with your insurance company to see how many discounts they have available. Then sign up for any that apply to you.
Shop for the lowest cost provider
It’s not an exaggeration to say that the difference in premium between the highest and lowest cost providers can be thousands of dollars.
Get quotes from multiple companies before deciding on which to choose.
Maintain credit clean
Keeping your credit clean for at least the last two or three years will help you get a better rate.
Bottom Line
Since car insurance in Michigan is more expensive than virtually any other state in America, it’s also more important to find the lowest-cost coverage than it is in most other states.
Take advantage of the tips above to keep your policy affordable without compromising coverage levels.
