Michigan has the most expensive auto insurance rates in the country. Furthermore, the sate has one of the highest Uninsured Drivers ratios at 19%. It is not all fun driving in the Great Lake State as the risks of being hit by an uninsured driver is pretty high. Perhaps these risks are the reason for the expensive premiums. Or it is another way around and expensive premiums are the reason why so many people cannot afford to buy liability coverage? In any case, finding the cheapest car insurance in Michigan may be the solution many motorists need.
One positive high number among these figures is the high auto ownership in the state. It is a wonder if it is a positive figure. Generally, lack of reliable public transport is the reason for higher auto ownership. People are forced to own their private transport when public transport fails them. Also, living costs are not too bad either. When the general prices are cheaper expensive premiums sticks out like a sore thumb and look to be even more expensive in comparison with the rest of the household expenses. So, you should try harder to find best prices as it is likely that your efforts will be rewarded.
Michigan Automobile Insurance Laws
This state is one of the few no-fault auto insurance states in America. Here are the minimum Requirements in MI
PPI is a mandatory coverage specific to Michigan. It provides protection for damages to third party buildings, fences, poles, other objects and properly parked cars (immobile property). PPI does not pay for any other damage to cars and only applies to damage to other people’s property.
Personal injury protection (PIP) pays for your and your family’s medical expenses no matter who is at fault. Michigan’s no-fault system provides you and your family with unlimited lifetime coverage for medical expenses resulting from a vehicle accident, regardless of fault. Here, each party’s Personal Injury Protection (PIP) pays for own injuries (no-fault) and therefore Bodily Injury Liability isn’t normally triggered.
You can read Brief Explanation of No-Fault Auto Insurance at the state website. Although it says brief on the title this document explain a bit about the coverage requirements and terms.
If you have moved to this state from another state you would need to familiarize yourself with minimum requirements. All companies will tell you what you must buy or include the state required minimum coverage automatically for you. However, you would want to know what you are buying and how the claims are handled. If you need explanation of how it works in MI you may need to contact a broker.
How Much Is Vehicle Insurance in Michigan?
Michigan’s no-fault requirements is said to be the main reason for high premiums in the state. Its unique law provides unlimited lifetime coverage for medical expenses.
Motorists have to buy Personal Injury Protection (PIP) as part of their minimum requirement, like any other no-fault state. For example, the required PIP is $10,000 in Florida. However, the state laws mandate that insurers cover up to $545,000 in medical claims. The rest of its unlimited personal injury claims is covered by the nonprofit Michigan Catastrophic Claim Association (MCCA) and another $160 per vehicle (in 2016) charged to every policyholder through their insurers for this service, on top of already expensive premiums.
“Auto consumers pay more than most states for car insurance due to the state’s high medical mandate. It is the only state in the country that requires auto consumers to purchase unlimited, lifetime medical benefits” explains Lori Conarton.
Another reason for the high premiums is that high costs drive nearly 20% of drivers out of the market as they cannot afford the premiums. This in turn adds more load onto policyholders since they have to shoulder the losses suffered by insurers. 80% of motorists (insured motorists) have to share 100% of the risks.
Average premium expenditure in MI is $1,131, which is $290 higher than the US average of $841. This is the average of total premiums collected in MI regardless of them being minimum liability only, full coverage or somewhere in between. If a good driver with no claim or traffic ticket wants to buy full coverage he/she needs to pay estimated $2,738, which is the most expensive in the country and more than twice higher than the US average of $1,325.
It simply is crazy high. The gap between the average premium expenditure and full coverage estimate tells us that large number of Michigan policyholders have basic liability coverage. And who can blame them? This is definitely not an ideal situation considering the residents aren’t rich (in comparison to other states) to pay for damages to their cars out of their pockets. They need proper protection as much as anyone else in the country.
Cheapest Auto Insurance Companies in Michigan
We discussed how expensive the rates are throughout the page. The cheapest company below is on average 5 times cheaper than the most expensive insurer in the state. There is no excuse not to get yourself good prices and save some money since you now know where to get it.
- Hastings Mutual, $551
- Chubb, $762
- Nationwide, $893
Auto Insurance in Detroit, MI
Detroit is the largest city by far. Detroit is one of the cities with the most expensive rates in the US. Detroit drivers pay about $1,000 more than the state average, which is over 70% more. The other expensive cities are Dearborn and Flint. Here you can find a few tips on how to reduce your city car insurance premium to help you in cities like Detroit.
It is really important to choose a company that deserves your money. Don’t forget that they have to work for their policyholders since insurers are nothing without the policyholders and premium payments. It is up to you to decide who gets your money. It would be a shame to pay a lot of money and still get bad customer service.
You can read reviews like above, find out about the claim payment record of a particular company by checking state department website and searching on the internet. Here you can check the leading auto insurance companies for claim payment. There is no doubt that there are a few great insurers in the Great Lake State and you should embrace the challenge to find them.