July 30, 2020

Who Has the Cheapest Car Insurance in Michigan?

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This is a question many Michiganders have asked, especially since The Wolverine State has some of the most expensive auto insurance in America. That’s because Michigan also boasts some of the most robust protections of any auto insurance in the entire country.

In this blog, we’ll answer questions like why is Michigan car insurance so expensive? But first, we’ll get into the more pressing matter at hand: how to save money, despite the high cost.

Let’s get started.

Michigan Cheapest Auto Insurance

In Michigan, all auto insurance coverage prices are relatively high. Because of Michigan no fault insurance laws, and other factors we’ll get into below, even relatively low prices in Michigan are high compared to national standards.

That said, there are always deals to be found.

In fact, according to one study[^1], Michiganders can save up to about $4,000 dollars per year on car insurance coverage by picking the right insurance provider. With the right conditions, average annual costs for minimum coverage can be as low as:

  • $1,304 dollars with USAA
  • $1,485 dollars with Auto-Owners Insurance Co.
  • $1,556 dollars with Frankenmuth Insurance
  • $1,729 dollars with Progressive

The next lowest? A big jump up to $2,909. But that’s still over $2,000 less than the state average, according to the same study. These numbers may not seem low, but they are relatively low for Michigan, where insured drivers pay up to $5,282 per year on average.

Let’s take a look at how that stacks up next to other states’ rates.

Michigan’s Rates Vs. Other States

Michigan car insurance rates are much more expensive than anywhere else in the US. While estimates vary depending on where in the state you live, most Michiganders can expect to pay more, on average, than all fellow US citizens in other states.

According to conservative Business Insider estimates, Michigan car insurance can cost anywhere from from $1,272 dollars to $8,723 dollars per year, about $3,343 dollars on average. Here’s how those numbers stack up against other states’:

  • The next-highest average annual cost is Louisiana’s $2,480 dollars
  • The average cost in Michigan is almost as much as Louisiana’s high point, $3,525 dollars
  • Some states are much lower:
  • Iowa’s range is $702 to $1,482 dollars, with an average of $1,100 dollars
  • Idaho’s range is $680 to $1,777 dollars, with an average of $1,122 dollars

Outside of individual state-by-state comparisons, Michigan’s average annual insurance is more than double the estimated national average of $1,566 dollars. So, any way you slice it, Michigan’s auto insurance rates are expensive.

But why?

What Factors Impact Auto Insurance Cost

Shopping for cheap car insurance in Michigan isn’t the same thing as shopping for the best car insurance quote in Michigan. With insurance, as with many purchases, you get what you pay for.

You also pay based on you and your vehicle’s characteristics, as well as your environment.

There are a handful of factors that determine cost, no matter where you are in the US — including the car insurance company you go through. These include but are not limited to:

  • Age of driver
  • Sex of driver
  • Driving history
  • Car make and model
  • Specifications of vehicle

In Michigan, in exchange for high rates, you’re getting protection you don’t get in other states. Or, you’re guaranteed protection that’s not promised anywhere else.

How Michigan Auto Insurance is Unique

Michigan car insurance is expensive mostly because of the unique no fault laws.

Like most states, Michigan has laws governing what insurance is required to own and operate a vehicle. However, unlike most other states, Michigan’s laws are robust. The no fault requirements include:

  • Personal Injury Protection (PIP coverage) – for all costs related to injuries from a car accident:
  • Medical expenses reasonably related to an auto accident, no limit
  • Wages lost due to a car accident, up to a limit
  • Property Protection Insurance (PPI) – for damage to property in the event of a crash, to
  • Residential property
  • Vehicles parked properly
  • Bodily Injury and Property Damage (BI/PD) – Residual liability coverage; Michigan only allows lawsuits for accidents involving death or out-of-state motorists, covering:
  • Up to $20,000 dollars for an individual’s injury or death
  • Up to $40,000 dollars for multiple casualties
  • Up to $10,000 for damage to property out of state

Note that, effective July 1st 2020, The PIP is no longer required to be unlimited. Michigan drivers will be able to opt into limited converge, at a steep discount.

Given these recent changes to the way these laws work, you may be wondering: when will Michigan car insurance go down? They already have.

To take full advantage of the potential savings, though, you’ll need to weigh all your options and decide which providers are best for you.

For that, we can help.

The Bottom Line

Here at Online Auto Insurance, our mission is to help you save money on your insurance rate. Whether you’re shopping for plans in Michigan, or anywhere else in the US, we’ve got you covered with our state-by-state guide.

Auto insurance can be complicated, but we’re here to make it less so.

Let us help you make your next car insurance decision. You won’t regret it.


DIFS. Your Guide to Automobile Insurancehttps://www.michigan.gov/documents/difs/Auto_Insurance_Guide_448003_7.pdf

Fitzpatrick, M. Best Car Insurance rates in Michigan. https://www.valuepenguin.com/best-cheap-car-insurance-michigan

Gursten, S. New Michigan No-Fault Law Passes: What You Need to Know.https://www.michiganautolaw.com/blog/2019/05/24/new-michigan-no-fault-law/

Knueven, L. The Average Cost of Car Insurance in the US.\ https://www.businessinsider.com/personal-finance/average-cost-of-car-insurance