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Michigan Car Insurance
Michigan is known for having the most comprehensive no-fault insurance system in the country and some of the highest car insurance rates as well. The ZIP code 48227 in Detroit has the highest average annual rate in the U.S., at $7,415. Even a driver with a great record will pay thousands of dollars a year in many Detroit-area suburbs. Rates fall substantially in Michigan s more rural areas.
While you don t have a choice about whether to buy car insurance in Michigan, you do have options on how much you pay for it. We ll show you how to be sure you are finding the cheapest car insurance in Michigan and provide average car insurance rates for your area so you can compare costs. We also explain Michigan car insurance laws.
The average car insurance rate in Michigan is $2,484 a year. The severity and frequency of claims in your neighborhood, your driving record, the type of car you drive, your credit and other variables are used by insurance companies to figure out the cost of your policy. That s why the price for the same coverage can vary by hundreds, sometimes thousands, of dollars among insurance companies. For example, in ZIP code 48236 the highest rate among six carriers is ($5,825) is more than four times as much as the lowest ($1,388). That means you could overpay by $4,437 if you don t shop around. Enter your ZIP code to see the average car insurance rate for your neighborhood. You will also see the highest and lowest rates from up to six major carriers surveyed to get an idea of what the most affordable car insurance price is in your area. For a more customized rate, choose from among six age groups and three coverage levels.
Cheap car insurance in Michigan
Michigan car insurance requirements
Michigan car insurance laws mandate that drivers carry minimum liability coverage limits of 20/40/10 on their vehicle.
Michigan laws also mandate that you have Property protection insurance (PPI). It is a mandatory coverage specific to Michigan. It provides up to $1 million in protection from damage to buildings, fences, poles, other inanimate objects and legally parked cars. Claims under PPI only apply to unintentional damage to other people’s property, so if you run into your own fence, you’ll pay out of pocket to fix it.
Personal injury protection (PIP) is also required. It is used to pay for medical expenses regardless of who is at fault. Michigan’s no-fault system provides you and your family with unlimited lifetime coverage for medical expenses resulting from an auto accident, regardless of fault. And, it s true that In Michigan, your bodily liability insurance will typically not be triggered for claims due to the pay outs that come under the no-fault PIP portion of your policy. But it s still wise to consider buying extra car insurance coverage.
Here s why: Under the few exceptions when your bodily injury coverage does come into play, you will only be covered up to your policy limits. If you have minimum bodily injury limits and are sued, you are responsible for paying the difference. For instance, if you kill another driver in an accident, and the family sues you for $100,000 for pain and suffering, your insurer will only pay out $20,000, leaving you to pay the remaining $80,000.
The good news is that full coverage usually isn t that much more expensive than minimum coverage. You do pay more if you choose to get higher liability limits, comprehensive and collision coverage, but typically the extra protection is worth the relatively small increase you pay for the best car insurance in Michigan.
Increasing your insurance from the state minimum to full coverage with a $500 deductible costs, on average, $472 more, or $39 a month. Boosting liability limits without getting optional coverages may even lower your rate, a savings of $363 in this example, as you ll see in the chart below. That s because insurers in Michigan typically consider drivers carrying higher limits to be less accident-prone.
$500 Comp/Collision deductible
*The table shows the average annual rate of nearly every ZIP code in Michigan from up to six major insurance companies. Rates are for a male driver, age 40, with a clean record and good credit for a 2016 Honda Accord. Data was provided for CarInsurance.com by Quadrant Information Services.
Recommended car insurance coverage
If you have few assets or you have an old car, you may want to buy cheap Michigan auto insurance. But keep in mind that even a minor accident will typically cost more than what your insurance policy will pay out if you carry just the coverage required to drive legally in your state.
- less than $50,000, choose at least 50/100/50
- between $50,000 and $100,000, choose at least 100/300/100
- more than $100,000, choose at least 250/500/100
If you’re leasing or financing your car, you must get coverage of 100/300/100 or higher.
Collision and comprehensive
It’s important to carry collision coverage on your vehicle if it’s newer or not easily replaced. This is because Michigan’s no-fault PPI insurance only pays for damages to properly parked vehicles. Also, the mini-tort law only allows you to sue an at-fault driver for up to $1,000 for other types of damage.
Collision pays for damage to your car from an accident. The average yearly cost for collision coverage in Michigan is $369, according to the Insurance Information Institute, an industry trade group.
There are three basic kinds of collision insurance to choose from in Michigan:
- Broad Form collision — pays for damages regardless of fault, with a deductible that applies only if you are substantially at fault
- Standard collision — pays for damages regardless of fault, with a deductible that always applies.
- Limited collision — pays only if you are not substantially at fault, and may or may not have a deductible.
Comprehensive insurance pays to replace stolen cars and for damages to your car from fire, flooding, hail, animal strikes, falling objects and vandalism. The average annual cost for comprehensive coverage in Michigan is $143, according to the III. If your car is:
- less than 10 years old, you should strongly consider buying collision and comprehensive.
- more than 10 years old, only buy collision and comprehensive if your car is worth $3,000 or more, if you couldn t afford to replace your car if it s wrecked, or if you just want more protection on your policy.
These coverages are optional in Michigan and should match the liability limits you choose. Uninsured motorist coverage and underinsured motorist coverage pays for damages if you re hit by a driver with no insurance or a driver with coverage that s insufficient to pay for your repairs and medical expenses.
Medical coverage (MedPay)
Medical payments coverage can help pay for the medical or funeral expenses of covered drivers and passengers after an accident, regardless of fault, up to $25,000. MedPay is optional in Michigan, and because you re required to carry PIP, MedPay isn t a must-have. The benefits of adding MedPay are that it covers passengers who don t have health insurance and there is no deductible
MedPay does the following:
- Covers you and your passengers medical expenses
- Pays for expenses after health insurance limits are exceeded
- Offers additional protection to insured drivers who are hit by a car while walking or biking
If you don t own your car outright and have an accident, gap insurance pays the difference between the cash value of your car and the current outstanding balance on your loan or lease.
- If you re financing your car, your car is less than one year old and you ve put less than 20 percent down on it, you should buy gap insurance. If not, you don t need gap insurance.
- If you re leasing your car, it s a good idea to buy gap insurance if you aren t already required to in your lease agreement.
- If you own your car outright, you don t need gap insurance.
Michigan car insurance rates by company
Below you’ll see average annual rates for Michigan, ranked cheapest to most expensive, for three coverage levels:
- State minimum liability requirements
- Liability limits of $50,000 per person/$100,000 per accident and $50,000 property damage
- Liability of $100,000 per person/$300,000 per accident and $100,000 property damage, with comprehensive and collision at $500 deductible