Why Is Car Insurance So Expensive in Michigan?

key Takeaways

Drivers in Michigan pay an average of $ 5,471 per year for car indemnity, with the state of matter seeing a 51 % addition in rates from 2015 to 2020 . The department of state ’ s extensive minimal coverage requirements — including outright personal injury protection coverage — put up to its high indemnity costs . other factors contribute to expensive policy costs in Michigan, such as the express ’ randomness higher-than-average rate of uninsured drivers and insurance fraud cases. Loading …

Why Michigan Car Insurance Prices Are So High

Why are Michigan cable car indemnity rates sol high ? The answer international relations and security network ’ thyroxine elementary. many factors contribute to why car policy is thus expensive in Michigan, including its no-fault condition, extra indemnity requirements, number of uninsured drivers, rate of indemnity fraud, claims processing practices and personal wound lawsuits.

The No-Fault Car Insurance System

Because Michigan is a no-fault state, drivers must have personal injury protection ( PIP ) coverage, which covers fiscal losses careless of who is at blame in an accident. This extra required coverage is one of the independent reasons insurance premiums in the department of state are so high.

Extra Insurance Requirements

Michigan ’ randomness car indemnity requirements state of matter that drivers must have PIP coverage, place auspices insurance ( PPI ) and a minimal of 20/40/10 in liability coverage. PIP coverage helps pay for your checkup bills and lost wages regardless of who is at fault, while property protection indemnity pays up to $ 1 million for price your vehicle causes to third-party properties. note that Michigan requires drivers to have unlimited PIP coverage, which guarantees inexhaustible life medical benefits to those injured in an car accident. While you may opt out of this if you have alternate medical coverage, it ’ mho one of the chief factors that increase the amount residents pay for policy. On average, car insurance providers in Michigan pay $ 555,000 for life medical benefits for injured parties, increasing the cost of policy for everyone.

Uninsured Drivers

Michigan has the second-highest numeral of uninsured drivers in the country, with about 26 % of drivers lacking car indemnity. That ’ s closely 13 % higher than the national modal. When uninsured drivers get into an accident, the early party ’ s policy supplier covers property damage and aesculapian expenses through uninsured motorist indemnity. A high rate of uninsured drivers compels insurers to shift the price to those with insurance to compensate for potential losses.

The Rate of Uninsured Motorists in Each State

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• state Uninsured Driver Rate

• Alaska

  16%

• Alabama

  20%

• Arkansas

  19%

• Arizona

  12%

• California

  17%

• Colorado

  16%

• Connecticut

  6%

• District of Columbia

  19%

• Delaware

  9%

• Florida

  20%

• Georgia

  12%

• Hawaii

  9%

• Iowa

  11%

• Idaho

  13%

• Illinois

  12%

• Indiana

  16%

• Kansas

  11%

• Kentucky

  14%

• Louisiana

  12%

• Massachusetts

  4%

• Maryland

  14%

• Maine

  5%

• Michigan

  26%

• Minnesota

  10%

• Missouri

  16%

• Mississippi

  29%

• Montana

  9%

• North Carolina

  Read more: The Best and Cheapest Auto Insurance Companies for Seniors

  7%

• North Dakota

  13%

• Nebraska

  9%

• New Hampshire

  6%

• New Jersey

  3%

• New Mexico

  22%

• Nevada

  10%

• New York

  4%

• Ohio

  13%

• Oklahoma

  13%

• Oregon

  11%

• Pennsylvania

  6%

• Rhode Island

  17%

• South Carolina

  11%

• South Dakota

  7%

• Tennessee

  24%

• Texas

  8%

• Utah

  7%

• Virginia

  11%

• Vermont

  9%

• Washington

  22%

• Wisconsin

  13%

• West Virginia

  9%

• Wyoming

  6%

High Rates of Insurance Fraud

In Michigan, it ’ south estimated that 10 % of no-fault indemnity claims are deceitful. Insurers pass on these losses to the policyholders, which is why premiums go up in states with high fraud rates. To avoid increase rates, drivers must protect themselves against fraud by educating themselves on deceitful schemes.

Short Processing Time for Claims

Michigan ’ s policy laws require car indemnity companies to reimburse claims within 30 days — otherwise, they ’ ll be penalized. This short seemliness period often doesn ’ thymine give insurers enough time to scrutinize claims by rights, which increases the overall rate of imposter. Insurers in the state have to make up for these losses by charging policyholders higher premiums.

High Rate of Personal Injury Lawsuits

In Michigan, the number of personal injury lawsuits went up by 130 % in the past ten years, with two-thirds of lawsuits involving drivers who sued their providers over no-fault indemnity claims. The country ’ sulfur no-fault system allows individuals to file for a personal injury lawsuit in case of dangerous injury.

Car Insurance Rate Increases in Michigan

car policy rates naturally increase each class due to many factors, such as the consumer price index, the price of repairing a car and the price of aesculapian worry. For case, MoneyGeek found that Michigan ‘s average car indemnity premium in 2021 was 51.1 % higher than in 2015. Drivers in 2021 give an average of $ 477 more per year for car indemnity compared to what they did in 2015.

How to Save on Car Insurance in Michigan

There are ways to find low-cost cable car insurance in Michigan, despite the state ’ sulfur notoriously expensive premiums. Below are a few actionable steps you can take to reduce your car indemnity rates. 1

Shop around for auto insurance rates.

Avoid the temptation of accepting the first car indemnity quotation mark you see. Insurers use different factors to determine your sample distribution rates, with some insurers weighing certain factors more heavily than others. By comparing quotes from assorted car insurance providers, you ’ ll find the best rates and coverages that suit your needs. 2

Bundle your policies.

Most car indemnity providers give discounts to people who buy respective types of insurance from the lapp ship’s company. You can score importantly lower premiums by bundling your home and car policies. 3

Ask about discounts.

indemnity providers offer a stove of discounts to stay competitive ; your unique position may qualify you for savings. Ask an agent what discounts you ’ re eligible for, and make certain to consider this when comparing quotes. 4

Use car insurance comparison tools.

While most policy providers have on-line quote tools, using these across several websites can be time-consuming. We recommend using comparison tools, like the MoneyGeek ‘s car policy cost calculator, which present quotes from multiple providers at once to help you weigh your options. 5

Increase your deductible.

Your deductible — the money you pay out-of-pocket when you make a claim — is a significant factor that can affect your rates. In general, the higher your deductible, the lower your premium. Consider increasing your deductible to lower your expenses. 6

Consider pay-as-you-drive coverage.

If you rarely drive, you may benefit from pay-as-you-drive coverage, besides known as pay-by-the-mile coverage. As the name suggests, indemnity companies calculate premiums for these plans based on how many miles you drive. Pay-per-mile plans can importantly cut insurance costs for people who drive less or close to the national average of 13,476 miles per year. About the writer

Mark Fitzpatrick is a aged content coach with MoneyGeek specializing in insurance. Mark has years of experience analyzing the indemnity market and creating original research and capacity. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a master of Arts .