Guide to Car Insurance in Michigan

Michigan is one of the most expensive states for car insurance in the entire country. There are a number of reasons for this, including its no-fault system, high minimum coverage requirements, and high rate of uninsured drivers.

The average cost of full coverage in the state is $3,013 annually, compared to the national average of $2,356. Minimum coverage costs an average of $1,085 annually, which is higher than the national average of $722.

By City

Here are some ways to cut down on your car insurance costs in Michigan:

1. Consider opting out of PIP. Due to Michigan’s updated 2020 auto insurance legislation, certain drivers now have the option to waive Personal Injury Protection (PIP) coverage. Seniors enrolled in Medicare Part A or B, for instance, may be eligible to drop PIP and potentially save hundreds of dollars each year on their premiums, relying on their existing healthcare plan to cover medical expenses from any accidents.
2. Maintain a clean driving record. Regardless of any past violations or claims, consistently driving safely and avoiding future incidents can gradually reduce your premium over time.
3. Shop around for the best rate. Before committing to a provider, take the time to gather and compare quotes from multiple insurers to make sure you’re getting the best deal.
4. Look into usage-based insurance. For those who drive infrequently or consider themselves cautious drivers, a pay-per-mile or usage-based insurance plan could be a smart choice. These plans monitor your driving habits and mileage to calculate a premium that reflects how much and how safely you actually drive.
5. Ask about available discounts. Many insurance providers offer discounts that aren’t always advertised upfront. Reach out to your agent to find out which ones you might qualify for.
6. Explore guaranteed coverage options. The Michigan Automobile Insurance Placement Facility (MAIPF) exists to ensure all Michigan residents can access auto insurance, even if they haven’t been able to find a plan through the standard market. To find and purchase an MAIPF policy, you’ll need to work with a licensed Michigan insurance agent. Visit their website for more information: https://www.maipf.org/home.

In Michigan, it’s not only necessary to have insurance, but also proof of insurance, be it physical or digital. If you’re caught driving without insurance, you could face:

• A $200 to $500 fine
• Imprisonment of up to a year
• A license suspension of 30 days or whenever you submit proof of insurance, whichever is later
• A $25 fee to reinstate your license

Let’s dive deeper into the car insurance and driving laws in the Great Lakes state.

No-Fault State

Michigan is a no-fault state, and a unique one at that. While in all no-fault states, each party pays for its own medical expenses, in Michigan, the state covers them entirely, along with lost wages and $20 daily in replacement services, in some cases. That means that if you get into a car accident and have bodily injuries, the state will always pay for them, even if the accident was your fault.

That being said, the at-fault party will still be responsible for the other party’s property damage, and the accident victim can still sue the perpetrator for a recovery (given they meet the serious injury threshold, detailed below). The state of Michigan has modified comparative negligence laws. In English, that means that the victim can only recover money if they’re less than 50 percent at fault².

DUIs

Michigan takes DUIs seriously, as they’ll stay on your record for seven years. For the first offense, you’ll get a 30 to 180-day license suspension, with limited driving privileges after 45 days. If your blood alcohol concentration is 0.17 or higher or if you have repeat convictions, you’ll need to install a DUI interlock device for a year.

Seat Belts

Michigan has a mandatory seat belt law for those over the age of 16 and in the front seat. The law is under primary enforcement, so the police can pull you over for not wearing a seat belt solely.

Distracted Driving

In Michigan, you can make calls on a handheld electronic device unless you’re a:

• Truck driver
• School bus driver
• Teen driver with either a level one or two graduated licensing status

However, texting and driving is illegal for all drivers, as it’s one of the most dangerous forms of distracted driving. These laws, like the seat belt laws, are under primary enforcement. The fines for illegal cell phone usage include:

• First offense: $100 fine, two points for school or commercial drivers
• Second offense: $200 fine, two points for school or commercial drivers<

Teen Driving

There’s a reason that car insurance costs for teens are so high. With little driving experience, teens are more likely to get into accidents and thus, have covered claims. Michigan takes a cautionary stance when it comes to teen drivers. All first-time, licensed drivers enter their driving experience on probation for the first three years.

If they get into any crashes or receive any tickets, they’ll have to face a driver assessment reexamination, which could lead to a license suspension and/or restriction. And if those tickets or at-fault accidents fall into the last 10 months of probation, the probation will be extended for another 10 months, which must be violation-free.

Fines for teens caught using phones while driving are higher than the rest of the population. If you’re caught using a phone while driving, you could pay up to $295 in fines. However, there are a few exceptions to take note of:

• Reporting a traffic accident, medical emergency, or serious road hazard
• Reporting a situation in which you think your personal safety is in jeopardy
• Reporting a crime or potential crime against yourself or another person

In the same vein, teens have stricter DUI penalties, as well. Michigan has a zero tolerance law when it comes to consuming alcohol and drinking. For the first offense, you could receive:

• A fine of up to $250
• 360 hours of community service
• A restricted license for 30 days
• Four points
• A $500 Driver Responsibility Fee for two years

Penalties only get more severe for the second and subsequent offenses. Even possessing alcoholic beverages in your car could land you in trouble, even if they’re not opened.

Statutes of Limitations for Claims

If you have a personal injury or property damage claim, you must file it in three years, the statute of limitations for claims in Michigan.

Cancellation and Nonrenewal Notifications

Companies can’t end your coverage without notifying you first, whether it’s a cancellation or a nonrenewal.

Make sure you get a new policy before your old policy ends to avoid a lapse in coverage.

Self Insurance

Do you have more than 25 vehicles? If so, you may be able to self-insure your cars, but it’s at the discretion of the insurance commissioner, according to the Michigan Legislature.

Inspections

Unless you’re insuring a salvage vehicle, Michigan doesn’t require annual inspections or emissions tests. That being said, to get your salvage vehicle inspected, use the below contact information:

• URL: https://dsvsesvc.sos.state.mi.us/TAP/_/#1
• Phone number: 1-888-767-6424

Proof of Financial Responsibility

What happens if you don’t have insurance and you get into an at-fault accident? Michigan doesn’t require SR-22s or FR-44s, but rather, you’ll have to get a special license that demonstrates financial responsibility. Here’s everything you need to know about the Financial-Responsibility Restricted Drivers License, straight from the Office of the Secretary of the State:

• It doesn’t include a photo, unlike regular driver’s licenses.
• It specifies that you can drive in one vehicle only.
• You’ll need to file a partial-payment agreement. In this document, you’ll agree to pay a judgment, and both you and the injured party will sign it.
• You’ll also need to file proof of insurance by either mailing it to:

Michigan Department of State Driver Record Activity Unit
7064 Crowner Drive
Lansing, Michigan 48918-0001
Or, call 517-636-6406.

Defensive Driving Courses

Have you been ordered to take a defensive driving course in Michigan? You can find one here: https://www.michigan.gov/msp/0,4643,7-123-72297_30536-230768–,00.html. Just note that it has to be four hours at a minimum.

Thresholds to Sue

No-fault accident victims have the right to sue, but in Michigan, only if they have either a serious impairment of a bodily function or a serious and permanent disfigurement.

See below for the state’s car and insurance-related contact information.

DMV Contact Information

Here’s how to contact the Michigan DMV:

• URL: https://www.michigan.gov/sos/0,4670,7-127-1640_14837-380898–,00.html
• Find a self-service station: https://miselfservicestation.com/
• Mailing address:
  • Michigan Department of State
    Renewal by Mail
    7064 Crowner Dr.
    Lansing, MI 48980-0001
• Email: https://mdossupport.happyfox.com/new/

Surprisingly given Michigan’s high car insurance costs, car repairs cost nine percent less than the national average at $350.77 for parts and labor. That divides into $202.30 for parts and $148.47 for labor, if you were wondering.

Rates of car theft and the number of traffic fatalities are two of the many factors that impact insurance costs. While Michigan has fewer car thefts than the national average, traffic fatalities were higher, unfortunately.

Car Theft

According to 2020 FBI data, Michigan had 185 motor vehicle thefts per 100,000 inhabitants, 33 percent less than the rest of the U.S. This number isn’t surprising, as the Midwest in general is the safest area for car theft. Compared to the rest of the U.S., the Midwest region has 54 percent fewer car thefts.

That being said, cities like Kalamazoo and South Bend have more car thefts compared to the rest of the state. Cities have more car thefts than rural and suburban areas in general, so these increased crime rates aren’t surprising.

Traffic Fatalities

While as a whole, Michigan has few car thefts, it didn’t fare as well when it came to traffic fatalities, with 985 per 100 million vehicle miles traveled in 2019. These rates are 28 percent higher than the rest of the nation.

Michigan drivers face some of the highest car insurance rates in the country, largely due to the state’s no-fault insurance system, high minimum coverage requirements, and a significant share of uninsured motorists.

Full coverage averages $3,013 per year, while minimum coverage runs $1,085 annually — both well above national averages. Costs vary widely by city, driving history, and driver profile, with Detroit drivers paying nearly double the state average.

By shopping around, maintaining a clean record, and exploring options like PIP waivers or usage-based insurance, Michigan drivers can work to bring their premiums down.