Average Cost of Car Insurance in Michigan 

Car insurance in Michigan costs $3,013 per year on average, which is one of the highest rates in the nation. It has historically been a very expensive state for car insurance, leading to recent auto insurance reform legislation, which was signed by Michigan Governor Gretchen Whitmer in 2019 and went into effect on July 1, 2020.

Changes to PIP Requirements

Previously, all Michigan drivers were required to carry unlimited personal injury protection (PIP), which drove up costs. The new legislation allows most drivers to choose between unlimited, $500,000, or $250,000 of PIP coverage.

Some drivers may also select $50,000 of coverage if they meet the eligibility requirements, including being a Medicaid recipient, or opt out entirely if they are enrolled in Medicare Part A and Part B.

How the Reform Impacts Premiums

The legislation requires that insurers reduce average PIP premiums for eight years, with the largest reduction of at least 45 percent applying to those with the $50,000 PIP option.¹ Insurers were also banned from using certain non-driving factors to determine car insurance rates, including gender, ZIP code, marital status, and credit history.

That said, Michigan still requires high minimum coverage limits and uses a no-fault system, which, among other factors, contributes to high insurance costs. However, it’s still possible to find rates closer to the national average ($2,356) 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 Coverage Level

You probably won’t find it surprising that the more coverage you get, the higher your insurance costs will be. Minimum liability coverage (property damage, bodily injury, and PIP) is $1,085 annually in Michigan, while full coverage (comprehensive, collision, and uninsured motorist coverage) is about $3,000 annually on average.

By Company

Different providers cater to different drivers and offer varying specializations (commercial auto, high-risk car insurance, etc.) that might increase or decrease their average annual rates. Here’s what those numbers look like for some of the biggest and best providers in Michigan.

By City

Your car insurance premium can vary even within the same state. In Michigan, Detroit has the highest average rate of any major city at 57 percent more than the state average. The average rate in Grand Rapids, by comparison, is below the state average.

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 fifties enjoying the cheapest premiums, at $2,866 per year.

Looking for the cheapest car insurance in Michigan? Here are some of 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 hundreds of dollars 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:²

• Bodily injury liability: $50,000 per person/$100,000 per accident
• Property damage liability: $10,000 per accident outside Michigan, $1 million per accident within Michigan
• Personal injury protection (PIP): $250,000*

*Drivers can opt for lower PIP coverage or opt out entirely if specific eligibility requirements are met, including health insurance requirements.

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 are injured in a car accident, your insurer 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 hundreds on your car insurance premium each year.

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.

We analyze average auto insurance premiums in Michigan for full and minimum coverage for good drivers with good credit as well as other driver profiles. That includes drivers with DUIs, accidents, speeding tickets, and teenagers. Full coverage averages use the following limits:

• Bodily injury liability: $100,000 per person/$300,000 per accident
• Property damage liability: $1 million per accident within Michigan/$10,000 per accident outside Michigan
• Personal injury protection: $250,000*
• Uninsured and underinsured motorist bodily injury: $100,000 per person/$300,000 per accident
• Comprehensive and collision: $500 deductible

*Lower limits may be possible for certain Medicaid and Medicare recipients.