Average Cost of Car Insurance in Michigan

Several factors determine the cost of car insurance in Michigan. Still, the number of uninsured drivers and population density are the two biggest determinants of car insurance rates in the state. Over 25% of drivers in the state are uninsured or underinsured, whereas the national average percentage of uninsured or underinsured drivers is only 12%.

As Michigan is a densely populated state, the roadways have a high number of drivers, meaning there is a higher risk of car accidents than in many other states. The increased risk of car accidents and the volume of insufficiently insured drivers means insurance companies are taking a high risk by insuring drivers in the state. When it comes to insurance, the higher the risk, the higher the premium.

The average car insurance rate in Michigan is about $2,190 annually for a full coverage policy or $1,880 annually for a minimum coverage policy. While the national average cost of car insurance is only about $1,670 for a full coverage policy, Michiganders pay more than the national average cost of car insurance for various reasons.

While the averages range from $1,880 to $2,190, you may pay above or below average for your policy. Car insurance companies and agencies may use several factors about you to determine your premiums, such as your age, gender, type of car you drive, credit score, and several other factors. Your insurer uses these things about you to determine risk–that is, how much your insurer is risking by insuring you. In Michigan, however, insurers aren’t permitted to use gender, credit score, marital status, or other personal details to determine your premiums.

Some drivers, like teenage boys or older folks, are riskier to insure than others. People in these groups often pay the most for car insurance because they have a higher risk of car accidents than other groups. In Michigan, insurers can use age to determine your premiums, but not gender.

The type of car you drive may also influence your auto insurance rates in Michigan. If you drive an older car that you own, you will likely pay more than average in car insurance premiums because insurers consider older cars risky. Similarly, if you lease or finance a new car, you may pay more than average in premiums due to the different coverage types your lender or leaser may require you to have on your policy.

If you own a new vehicle, you will likely pay less than those who own older vehicles or lease new cars because insurers consider owning a new vehicle the lowest risk.

Factors about you as a driver are only one piece of determining premiums. We already went over how population density and the percentage of uninsured drivers affect Michigan car insurance rates. Still, one of the other large-scale factors is Michigan’s no-fault law. 

A no-fault law means that, in an accident, a driver will automatically default to their own insurance to pay for their medical expenses or repairs to their vehicle instead of that at-fault party. Many states with no-fault laws require drivers to carry some PIP or personal injury protection. Michigan requires drivers to have around $250,000 worth of PIP coverage, with lower limits available to those enrolled in Medicare or Medicaid. A minimum of about $250,000 of PIP is high and is among the most significant contributing factors to generally high Michigan car insurance rates.

On top of PIP, Michigan’s no-fault law also requires all drivers to carry a minimum of $50,000 of bodily injury per person per accident, $100,000 of bodily injury per accident, $10,000 of property damage liability  (50/100/10 liability coverage) and, at most, $1 million in property protection insurance (PPI).

Bodily injury and property damage liability are at-fault coverage types. If you’re involved in an accident and deemed at fault, the funds from these coverage types will go toward the victim’s medical expenses and vehicle repairs. 

PPI is another no-fault coverage, similar to PIP, that the policyholder invokes to help cover the cost of repairs to the other party’s property, regardless of who was at fault in the accident. PPI will only cover the cost of repairs for properties like fencing, mailboxes, or parked cars. PPI does not cover the cost of repairs for a vehicle damaged while in use.

Michigan car insurance costs about $2,190 annually for a full coverage policy or about $183 per month. Many drivers in the state opt for a full coverage policy due to the high number of uninsured or underinsured drivers in the state. Here at Clovered, we recommend Michiganders opt for a full coverage policy to ensure they’re protected in any accident.

If you value cost over coverage, the average price of a policy that meets all the minimum car insurance requirements in Michigan but doesn’t exceed them is about $1,880, or nearly 15% less than the cost of a full coverage policy. 

In terms of average car insurance cost, Michigan has one of the highest rates in the nation. Various factors contribute to the state’s high insurance rates, namely the no-fault law and the high number of uninsured or underinsured drivers in the state. 

The average car insurance in Michigan is a policy that at least meets all the legally mandated requirements. State law requires all drivers to carry at least 50/100/10 of bodily and property damage liability coverage, around $250,000 of personal injury protection (PIP), and up to $1 million of property protection insurance (PPI). For those who lease or finance their vehicle, the average policy will also include a minimum of collision coverage required by their lender.

The average driver in Michigan will likely have a policy with a higher liability limit than the state-mandated minimum. Many drivers will opt for a 250/500/10 liability limit, thus raising the cost of their premiums but providing much more coverage.

Michigan car insurance is high due to several large-scale factors, like laws and population. The no-fault law mandates a legal minimum amount of car insurance all drivers must carry, and the minimums aren’t minimal. Every driver must have at least 50/100/10 liability coverage, about $250,000 of PIP coverage, and at most $1 million in PPI. These coverage minimums are higher than average, even for the other 13 states with no-fault laws. 

The state population is a critical factor that drives up insurance costs. A high population coupled with a statistically higher-than-average number of uninsured drivers causes insurance companies to increase the cost of premiums due to the risk of the policyholder filing a hefty claim. 

While using ZIP codes in determining premiums is permitted in some states, it’s prohibited by law to determine car insurance rates by city in Michigan. Due to this law, policyholders in less populated cities, like Traverse City or Brighton, wind up paying more due to the higher risk insurers take when insuring drivers in densely populated cities like Detroit or Lansing. All these factors contribute to high average car insurance rates in Michigan.

The average cost of a full coverage policy in Michigan is $2,190 annually or about $183 monthly. Some insurers will give policyholders a discount for paying annually or twice annually instead of monthly, so if you value having great coverage at a low cost, you may consider opting for annual or bi-annual payments instead of monthly payments.

Here at Clovered, we recommend that Michiganders opt for a full coverage policy rather than a minimum one. You must always select the policy that best suits your needs. Still, due to the high number of uninsured drivers in the state, you will likely be safer with a full coverage policy than a minimum coverage policy.

A full coverage policy in Michigan will have some degree of liability coverage, whether it’s the minimum required amount of 50/100/10 or the average amount of 100/300/100, $250,000 or more in PIP coverage, at most $1 million in PPI coverage, and some additional coverages like uninsured/underinsured motorist coverage, collision coverage, and comprehensive coverage. All these coverages ensure you don’t have any blind spots on your policy and work together to protect you on Michigan’s roads.

In Michigan, the average cost of PLPD insurance, or Personal Liability and Property Damage insurance, is $1,880. PLPD may mean something different in each state, but in Michigan, it refers to the minimum amount of legally required insurance. So, when it comes to PLPD insurance, Michigan residents will find it refers to the state-mandated minimum amounts of bodily injury liability, property damage liability, PIP, and PPI. 

Whether you’re getting car insurance for the first time or shopping around for a lower rate, getting a car insurance quote in Michigan may come with some initial sticker shock. However, the best way to get the best Michigan rate is to get and compare quotes online.

Here at Clovered, we have a free quoting tool to help you compare Michigan car insurance quotes in minutes. If you would rather speak with an agent, you can call us at 833-255-4117 or email us at agent@clovered.com.