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Back in 2019, Michigan underwent an auto insurance reform that promised to save drivers money on their yearly premiums by allowing individuals to opt out of unlimited lifetime personal injury protection (PIP). Now, 4 years later, Michigan car insurance is still 22.1% more expensive than the national average.
Car insurance rates are highly personalized and depend on several factors, including your driving history, age, and – of course– the state you live in. According to Rate Retriever’s Auto Insurance Rates Quarterly Update, on average, drivers in Michigan pay $2,228 per year for their car insurance premiums. However, some drivers in the state face rates as high as $5,739 annually based on their unique driver profile.
One important thing to note about car insurance in this state is that gender is not considered in setting rates. Michigan is one of only 5 states in the U.S. where it is prohibited for insurers to take a policyholder’s gender into account while determining their premium.
In the state of Michigan, the minimum amount of car insurance coverage you need is at least $50,000 in bodily injury liability per person per accident, $100,000 in bodily injury per accident, and $10,000 in property damage liability per accident. Drivers can also get additional coverage, such as comprehensive, collision, and uninsured or underinsured motorist coverage.
The coverage level you choose will have an impact on the price you pay. On average, drivers with a minimum coverage car insurance policy pay 56% less than those with premium full coverage while those with a standard full coverage policy with slightly lower limits pay around 7% more.
According to Rate Retriever’s data, credit score plays a huge role in how much you will pay for Michigan car insurance. Drivers with poor credit are at risk of paying up to $5,739 per year for car insurance. This is 158% more than those with good credit.
Furthermore, drivers with fair credit pay an average of 29% more than those with good credit. That is a difference of $656 per year on average for an annual premium of $2,884. Conversely, having an excellent credit score is a good way to save money on your Michigan car insurance. These drivers save an average of 21% per year on their premiums with an annual rate of $1,754.
However, in Michigan, insurance companies are not permitted to deny coverage or refuse to write or renew a policy based on credit score.
Zip code is another major factor used to determine rates. Currently, the most expensive zip code in Michigan to insure your vehicle is 48205 in Detroit. This area has an average annual premium of $4,916. There are several reasons why car insurance might be pricier in this area of the state. Firstly, Detroit has a high population density of 4,606 people per square mile.
Densely populated areas like this bring a higher likelihood of car accidents, increasing the amount of risk that the policy introduces to an insurer. Additionally, this zip code brings with it an increased risk of car theft. According to News Channel 7, car theft in Detroit went up by 45% in 2022, further increasing the risk accrued by car insurance companies when they cover vehicles in this area.
The cheapest zip code in Michigan is 49456. The average annual premium for this area is $1,644 and it is located in Spring Lake. Being a more suburban neighborhood than Detroit, car insurance companies likely set lower rates for this zip code because there is less risk associated with it. With a population density of just over 900 people per square mile and a very low rate of car theft, drivers in Spring Lake are less likely to file a claim.
Even with an annual premium almost 23% above the national average, there are still ways you can save money on car insurance in Michigan. One of the easiest ways to do this is to comparison shop and see which insurer in your area has the lowest rates for you. Take our short quiz to compare and find savings fast.
Another method to save money is to improve your credit score. Since those with poor credit pay over 150% more while those with excellent scores pay about 20% less for car insurance, raising your score is a good way to save money on your premium. The best way to do this is to be sure that you are paying your bills on time and that you do not have any outstanding payments due.
Next, raising your deductible can help to minimize your monthly car insurance rates. It is important to note that by doing this, you are accepting more financial responsibility if you ever have to file a claim. This means that while this will save you money in the short term, you may end up paying more in the long term. Keep this in mind before deciding to raise your deductible as it may not be the best option for every driver.
Completing a safe driving course is another way to cut down on costs. Several major car insurance companies offer discounts for policyholders who complete defensive driving courses because brushing up on your driver’s education makes you less of a risk to insure.
Besides all the options above, being a safe driver is the best way to decrease your annual premium. When car insurance companies determine the rate they would charge you, they will consider your driving record first and foremost. If you have a track record of safe habits, your annual premium will reflect that.
Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:
Read more about the factors that impact your car insurance rate
Switching your car insurance is easy, even if you are in the middle of your current policy.
Here are some helpful tips to consider to switch your car insurance:
The answer to this question depends on where you live and what you would like to cover.
Each state has its own minimum requirements on the type and amount of insurance needed. When you’re trying to determine what and how much car insurance you need, you can start by reviewing your state’s requirements.
Find out what’s required in your state
Once you review your state’s minimum requirements, you may find that you want additional coverage. For example, sometimes owners of new cars want comprehensive coverage to insure their car from natural disasters and vandalism, even though comprehensive coverage isn’t required by their state. To figure out what insurance you want, you can review the different types of insurance to decide what makes the most sense for your situation.
The biggest difference between Rate Retriever and other comparison sites is that we are a free and impartial research tool NOT an insurance marketplace. This means you can’t purchase a policy directly through RateRetriever.com, but you can use our tool to independently research your options and seamlessly connect with the provider you choose.
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There are many ways you can try to get cheaper car insurance. The first is simply to get quotes from multiple providers. This will help you determine if you’re currently receiving the cheapest rates based on your needs and driver profile. Rate Retriever makes the comparison process easy.
Sometimes, the reason your car insurance is so expensive is due to your driver profile. For example, drivers under 20 years old usually pay more for insurance than more experienced drivers, and drivers with a recent at-fault accident or traffic violation typically pay more.
There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.
Rate Retriever works with national and local insurance providers to provide our users with a seamless insurance shopping experience. We may earn a commission from our insurance provider partners when you click on a link, call, or purchase a policy from one of the providers listed on our site. That said, we’re committed to providing you with accurate, bias-free information, and we do not allow our partnerships to limit the results or influence the information we share with you.
We do not sell your personal information, charge you for using our tools, or sell you insurance policies. Additionally, should you choose to purchase a policy from one of our partners, the price you pay will not be adversely affected.
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