Michigan has a long and dubious honor as the most expensive state in the union for auto insurance. A requirement that drivers purchase Unlimited Personal Injury Protection (UPIP) in their insurance policies has lead to massively inflated premiums.
Now there is a reform from the government that will remove that UPIP requirement for Michigan drivers. We will discuss, later in this article, the new law.
And we will also explore how to get the cheapest car insurance in Michigan.
Michigan Car Insurance: Rates May Be Coming Down
In our rate analysis, the cheapest auto insurers, on average, in Michigan are:
- Met Life: $1,169/year ($97/month)
- Hastings Mutual: $1,410/year ($118/month)
- Chubb: $1,755/year ($146/month)
- Pioneer State Mutual: $2,018/year ($168/month)
- MEEMIC (for educators only): $2,045 ($170/month)
In early 2019, the average Michigan car insurance policy cost $2,708 yearly, about 84% higher than the US average of $1,470 a year.
Average rates are definitely not your final quotes, the only way to get your cheapest car insurance quotes is to compare your quotes from several insurance companies.
Michigan had previously required that all drivers purchase an Unlimited Personal Injury Protection (UPIP) policy that gave unlimited benefits to drivers injured in accidents, but also caused medical providers to bill auto insurers high rates for treatment, thus inflating costs for drivers and insurers.
In May 2019, Michigan Governor Gretchen Whitmer (D) signed a reform to end this requirement. The new law will allow drivers to choose various levels of medical coverage for PIP. Drivers will also be able to use their own medical insurance instead of purchasing costly UPIP coverage.
The expected savings are an average of $500 a year for Michigan drivers’ auto insurance.
Cheapest Car Insurance by Age
The youngest drivers, aged 16-19, are extraordinarily expensive to insure. Not only is Michigan the most costly state in which to buy auto insurance, it also is a place where young, inexperienced drivers have the costliest median rates of coverage. You may want to look for the best car insurance companies for teenagers.
|Age||Rates with Parents||Rates Alone|
As expected, older drivers in Michigan gain savings as they go up in age. Below are insurance companies offering the cheapest rates for drivers of different ages in Michigan:
|18 year-old male||30 year-old male||60-year-old male|
|1. USAA ($6,485)||1. USAA ($2,482)||1. USAA ($2,452)|
|2. Progressive ($11,425)||2. Progressive ($2,904)||2. Progressive ($2,740)|
|3. Nationwide ($11,824)||3. Geico ($4,442)||3. Nationwide ($3,978)|
|4. Geico ($12,315)||4. Nationwide ($4,478)|
|5. Farmers ($14,128)|
By 2025 there will be one in four drivers over 65 in Michigan. Safety concerns are an issue in a state with icy winter roads and springtime storms.
But online schools, such as “I Drive Safely” offer driver refreshment courses for as low as $29.95, giving older people a discount (5-10%) on yearly auto insurance upon completion.
Driving less annual miles is another way to get a better rate, along with good credit, and having a safe driving record.
Drivers who choose basic coverage, which is the least expensive, save an average of $900 a year in Michigan. But if your basic policy only pays $20,000 and you are injured in an auto accident with medical costs of $75,000 your savings of $900 a year will pale against the $55,000 you will owe health care providers. Consider full coverage even if you must spend slightly more, as it may be welcome the day you suffer injuries in a crash.
Bundling home and auto insurance is another good way to save some money. Michigan homeowners’ insurance rates are “some of the lowest in the nation” averaging $908 a year. The US average is $1,173.
Cheapest Car Insurance for DUI Drivers in Michigan
Driving under the influence of drugs or alcohol (DUI) is a serious and life threatening offense which, of course, is strictly prohibited in the state of Michigan.
Just one DUI conviction in Michigan can raise your yearly insurance rates by a mind-boggling 177% a year, from an average of $2,611 to $7,239! That is 79% greater than the median US hike.
But here are some average “affordable” insurance companies in Michigan for drivers with one DUI:
- Progressive: $1,746/year ($146/month)
- Auto-Owners: $3,982/year ($332/month)
- AAA: $5,524/year ($460/month)
- GEICO: $6,024year ($502/month)
- State Farm: $7,238/year ($603/month)
A blood alcohol concentration measuring 0.08% or higher is a DUI in Michigan. Any driver under the age of 21 with a BAC of 0.02% or higher will be arrested.
If you have one “at fault” crash, your rates will also go up. But Esurance ($3,807/year), Auto-Owners Insurance ($3,778), and Frankenmuth ($3,321) are all cheaper than average for full coverage insurance. Remember that your rates will remain be spiked for three to five years after you cause an accident or if you have a moving violation.
If you have more than one DUI, or DUI and “at fault” crash or reckless driving, you may be deemed high-risk drivers and required to have car insurance policy with SR-22 filing in Michigan. Your current insurer might drop you and you may want to look for car insurance from one of the best car insurance companies for high-risk drivers.
Cheapest Car Insurance for Drivers with Bad Credit and In High Crime Areas in Michigan
Credit scores are another way Michigan insurers assess risk. A bad credit rating (under 400) can impact you with higher premiums. Average “worst” credit auto insurance costs $6,376 in Michigan as compared to $2,610 for all other credit averages.
For a 40-year-old driver with bad credit, here are three insurers with better rates:
- Auto-Owners Insurance: $4,165/year ($347/month)
- Frankenmuth: $5,547/year ($462/month)
- Esurance: $5,801/year ($483/month(
A recent study found that some 97% of zip codes in Michigan have unaffordable car insurance relative to income. In poverty stricken Detroit, the average auto insurance premium is $5,414 a year, double the statewide average of $2,610. Some Detroiters spend 12-36% of their income on car insurance, a terribly expensive burden.
Some 1.7 million Michigan households (43%) did not earn enough money in 2017 to pay for basic needs, including auto insurance.
So if you live and drive in Michigan and struggle to pay for auto insurance, sadly, you are not alone.
Michigan Towns: A Rundown of Cheap Auto Insurance
Once the center of the auto industry, sprawling but mostly empty Detroit now has only about 673,100 residents, down from a peak of 1.8 million in 1950.
With high crime and high poverty, the city is also burdened with extremely high auto insurance prices, averaging $6,197 a year.
But Auto-Owners ($3,636), Farm Bureau ($3,420), Chubb ($3,108), Hastings-Mutual ($3,024) and MetLife ($2,136) all beat the averages.
Grand Rapids, MI
Michigan’s second largest city (198,829) is located thirty miles east of Lake Michigan along the Grand River, deep in an area of woods and forests that once made it the furniture capital of America. Today, breweries and art are supplanting the old industries, and attracting younger residents.
The average auto insurance policy in Grand Rapids is $2,446 a year. But MEEMIC ($1,728), Chubb ($1,536), Pioneer State Mutual ($1,452) Hastings Mutual ($1,284) and MetLife ($996) all offer better rates.
Warren is some 21 miles north of Detroit and is the home of GM’s Cadillac division. The city has 134,000 people, the third largest in Michigan.
Unfortunately, Warren also has a higher level of crime, 18% greater than Michigan which translates to larger than normal auto insurance rates, with the average yearly premium at $3,446 a year.
But these insurers offer better rates for Warren drivers:
MEEMIC ($2,076), Pioneer State Mutual ($2,028), Hastings Mutual ($1,740), Chubb ($1,716) and MetLife ($1,092).
Sterling Heights, MI
The fourth largest city in Michigan is Sterling Heights with 130,000 located within the Detroit Metro region. A large Fiat-Chrysler assembly plant there employees over 1,000 people. The area is affordable, with an average home costing $164,700 and median rent at $949 a month.
Auto insurance in Sterling Heights is 5% more than the Michigan average at $3,223 a year. But thrifty comparison-shopping finds Pioneer State Mutual ($2,028), MEEMIC ($2,028), Chubb ($1,668), Hastings Mutual ($1,404) and MetLife ($1,176) offering better deals.
Ann Arbor, MI
Home of the University of Michigan, Ann Arbor, with 114,000 citizens, is Michigan’s sixth largest city and is often cited as a top place to live; safe and neighborly.
It has 27% cheaper-than-state average auto insurance premiums, at $2,233 a year. SECURA ($1,500), Chubb ($1,440), Pioneer State Mutual ($1,332), Hastings Mutual ($1,032) and Met Life ($960) all come in with economical rates.
Fixing Michigan’s “Luxury Priced” Auto Insurance
Michigan’s no-fault auto insurance system was created in 1973, partially to keep down the costs of lawsuits.
However, the requirement that all drivers purchase an unlimited amount of medical coverage (UPIP) made premiums soar, and created the most expensive auto insurance market in the country.
Lawyers, seeing big payouts, began to sue insurers when victims were injured in auto accidents to recover money for incapacitated clients. Lawsuits proliferated and insurers raised rates in response.
To avoid high premiums, some 1 in 5 Michigan drivers broke the law and went without insurance, which made the costs of insurance go even higher.
As we said earlier in this essay, the new law, signed in May 2019 by Gov. Gretchen Whitmer, with bi-partisan support, will allow the over 7 million drivers in the state to choose the level of coverage they need under personal injury protection (PIP). Legislators hope this will help lower costs for all Michigan auto insurance.
The minimum insurance requirements in Michigan are:
- $20,000 bodily injury per person per accident
- $40,000 bodily injury for all persons per accident
- $10,000 property damage liability
- $20,000/$40,000 uninsured motorist bodily injury
- Optional PIP with a $0, $300 or $500 deductible
Additional coverage to pay for collision damage or theft is optional, but highly recommended by experts.
- Michigan is statistically the most expensive state for auto insurance.
- However, a new law (May 2019) hopes to lower costs by reducing the amount of personal injury protection an insured person needs to purchase. Limited PIP will become a choice for Michigan drivers.
- The most expensive areas have the highest crime rates. Consider moving, if you can, to a safer area.
- If you have bad credit, a moving violation or DUI, your rates spike significantly. Drive soberly and cautiously!
- Rates are highest for the youngest drivers, 16-20, but can be lowered by putting young drivers into family plans.
- Compare rates online between insurers, and even ask your friends what their rates are.
- If you are in a “safer” profession, ask your broker or insurer for discounts.
- Consider bundling home and auto insurance from one provider.
- Ask for higher deductibles to lower premiums
- Reduce collision coverage if you drive an old car
- Take advantage of low mileage discounts
- Before you buy a car, remember to compare insurance rates for different types of cars
- Bad winter weather and uninsured drivers are additional risks for Michigan drivers and should be considered when buying collision and uninsured motorist coverage.
- Don’t be penny wise and dollar foolish.