Michigan drivers hold claim to living in the State with the second highest car insurance premiums in the USA. Only Louisiana drivers pay more on average for car insurance coverage according to a study by Insure.com
” Michigan drivers pay an average of $2,098.29 annually for car insurance compared to a national average of $1,429.26 – over 40% more“
Why are Michigan Car Insurance Rates so high?
Industry experts agree that Michigan drivers are not worse drivers than people living elsewhere but just victims of state laws surrounding the payment of medical benefits to injured parties in a car accident. Michigan State does require minimum amounts of car insurance but car insurance companies also have unlimited exposure to medical costs for accident victims. In fact, the state requires all car insurance companies to provide unlimited medical benefits for the life of anybody injured as a result of a car accident. This is unheard of in all other states where liability for a car insurance company is limited to policy coverage limits. While there is some kind of ceiling before a statewide fund kicks in ($460,000) this exposure affects car insurance rates for all Michigan drivers.
A smaller factor is Michigan’s high unemployment rate which is causing a great increase in the number of uninsured drivers but the main reason for high Michigan car insurance rates is the exposure to lifetime medical payments.
Michigan is a No Fault Car Insurance State
Michigan drivers do enjoy no-fault car insurance laws even with the high rates. Since every driver is responsible for their own damages those who operate a vehicle uninsured or underinsured may not have any claim to damages in the event of an accident. Michigan State law requires all drivers to have liability insurance with minimum coverage of:
- $20,000 liability insurance per person per accident
- $40,000 bodily injury coverage for all persons per accident
- $10,000 in property damage coverage
- Personal Injury Protection coverage (PIP)
Most Michigan drivers opt for increased coverage as these limits are fairly low with respect to the potential financial consequence of a car accident. Additional coverage well exceeding $100,000 per item above can usually be added to any car insurance policy for a nominal increase to premiums.
Michigan Car Insurance Companies
Although car insurance laws make auto insurance very expensive in Michigan it still counts a long list of car insurance companies licensed to write auto insurance policies for Michigan drivers. The best way to find a list of Michigan car insurance companies is to start an online car insurance comparison search and compare policy terms, rates and companies from the comfort of your home.
What if I am denied Michigan Car Insurance?
If you are denied coverage through the voluntary market you are probably eligible for auto insurance coverage through the (MAIPF) Michigan Auto Insurance Placement program. Learn more about obtaining car insurance through the Michigan Auto Insurance Placement Program here.
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