Average Cost of Car Insurance in Michigan

Car insurance in Michigan costs $1,418 per year on average, which is the third-highest rate in the country.¹ Don’t panic if this number seems high.

As we stated above, insurance rates will differ from provider to provider, ZIP code to ZIP code, and person to person. You still might be able to find rates closer to the national average ($1,047) or even cheaper if insurance providers view you as a low-risk driver. You can also follow some basic tips to save on car insurance, which we’ll look at more closely below.

By Age

Age is a primary determining factor for car insurance costs in Michigan. Younger drivers tend to pay the highest auto insurance rates because they’re more likely to file claims and get into car accidents. Older and middle-aged drivers pay the lowest rates in the state on average, with drivers in their sixties enjoying the cheapest premiums, at $2,346.

Looking for the cheapest car insurance in Michigan? Here are the most affordable providers based on a variety of demographics.

Here are a few simple ways to save on car insurance in Michigan.

1. Get guaranteed coverage. The Michigan Automobile Insurance Placement Facility (MAIPF) was established to guarantee that auto insurance is available to all Michigan citizens who are unable to find plans in the voluntary market. You can search for and purchase an MAIPF policy only through a Michigan-licensed insurance agent. Learn more about its services here: https://www.maipf.org/home.
2. Opt out of PIP. Michigan’s 2020 auto insurance laws make it possible for some drivers to opt out of the “mandatory” PIP coverage. For example, if you’re a senior with a Medicare Part A or B plan, you can forego your PIP insurance and save yourself around $500 on your premium annually. Instead of using PIP, you’ll use your healthcare coverage for any medical bills stemming from a car accident.
3. Drive safely. Even if you’ve accrued points on your system or have a history of claims, you can lower your premium over time by maintaining an accident and violation-free driving record.
4. Compare quotes. Be sure to shop around and compare quotes before deciding on a provider.
5. Get usage-based insurance. If you don’t drive often and/or you drive safely, consider signing up for a pay-per-mile or usage-based plan. Both policy types will track your driving and determine your premium based on how much and how safely you drive.
6. Ask about discounts. You may not know what discounts providers offer until you ask. Talk to your agent to see if you can apply for any new discounts.

According to Michigan’s Department of Insurance and Financial Services, here are the state’s minimum car insurance requirements and coverage limits:

• $50,000 for bodily injury per person
• $100,000 for bodily injury per accident
• Up to $10,000 for property damage in another state
• Up to $50,000 in PIP if you’re enrolled in a Medicaid plan, or up to $250,000 if you have non-Medicare health coverage
• $1 million in property protection for damages to buildings, fences, and properly parked cars in Michigan

Michigan follows a no-fault law for medical expenses and a modified comparative negligence fault law for property damage. Here’s how it works.

Michigan’s no-fault law states that if you get into a car accident and endure bodily injuries, the state will cover all of your medical expenses and lost wages under your PIP. This applies to both you and the other party, regardless of who is at fault in the accident.

For property damage, however, the at-fault party is still responsible for the other party’s damages. The victim must be less than 50 percent at-fault in order to receive compensation from the other party, and the victim can still sue the other driver if they’ve endured a serious bodily function impairment or permanent disfigurement.

Michigan does not mandate an SR-22 or FR-44 if you’ve been in an at-fault accident. Instead, you will have to apply for a financial-responsibility-restricted driver’s license. This is a specialized license that limits you to driving only vehicles stated on your license. In order to apply for the license, you’ll need to:

1. Fill out a partial payment agreement that states that you’ll agree to make payments toward the judgment of your at-fault accident.
2. Mail your proof of insurance to the Department of State Driver Record Activity Unit.

Although Michigan has some of the highest average car insurance rates in the country, there are some ways to bring those costs down. If you’re eligible to opt out of PIP, you can save around $500 on car insurance.

Otherwise, compare quotes before deciding on a provider, ask about ways to save, and maintain a safe driving record. Remember, insurance rates differ drastically from person to person and from company to company, so the only way to know if a provider has the best rate for you is to apply for a quote.