Auto Insurance in Michigan


Michigan, birthplace of Henry Ford and the auto industry, is home to the most inclusive no-fault auto insurance coverage in the country. Insured motorists in the Wolverine State enjoy more protection when it comes to auto insurance benefits than any other U.S. state. For example, if you are in a car crash, even if you caused the accident, Michigan auto insurance laws guarantee that you will receive unlimited medical benefits—provided you are driving with the minimum mandatory insurance.

The price tag for this coverage? If you’re a Michigander, you’re probably paying the most expensive auto insurance rates in the U.S.

Michigan car insurance rates pounded by injury costs

Michigan knocked out Louisiana as the No. 1 state in the nation for having the highest average annual auto insurance premium. The state’s average premium increased by more than $440 from 2010, enough for the state to rise from second place to first place.

A primary reason for the hefty increase in premiums was due to a yearly assessment by the Michigan Catastrophic Claims Association (MCCA). All insurance companies doing business in the Wolverine State are responsible for sharing Michigan’s calamitous medical claims. Unfortunately, that means drivers end up paying, because the costs are going to be passed on to the consumer. That means policyholders bear the brunt of an approximately $144 per auto assessed costs passed on to the auto owner, for 2010-2011.

Another reason for the increase in premiums is due to uninsured motorists and the damage they cause, the costs of which are passed on the drivers who then make claims on their uninsured/underinsured coverage. Seventeen percent of Michigan drivers were driving without any type of insurance coverage, according to a 2009 study by the Insurance Research Council

The economy plays a role in the large numbers of uninsured; the numbers of motorists without insurance is apt to rise along with the unemployment rate.

Michigan’s mandatory insurance laws 

No-fault insurance is required by law in Michigan. It’s important to note that basic no-fault insurance does NOT pay for your car repairs; therefore, you will want to discuss with your insurance company or agent, the best possible coverage for protecting your vehicle.

It is mandatory for Michiganders to carry minimum auto insurance coverage, including personal injury protection, otherwise known as PIP. In addition, the minimum limits of coverage that every motorist must purchase are:

  • $20,000 – bodily injury, one person
  • $40,000 – bodily injury, per accident
  • $10,000 – property damage

The steep costs of driving while uninsured

Because Michigan is a no-fault state, if you do not carry basic no-fault insurance, you can be held personally liable for any car accident you cause. You also risk exposure of being sued.

Other potential penalties may include:

  • Misdemeanor charges
  • Up to $500 in fines and/or serve a jail sentence of up to 12 months
  • License suspension for up to 30 days, until the point at which you provide evidence of a current auto insurance policy

Beware of unscrupulous auto insurance companies

With the rising costs of insuring your automobile, some individuals may unknowingly purchase policies from companies or agencies falsely identifying themselves as licensed auto insurance companies. Under Michigan auto insurance laws, any auto insurance agent, agency or company is required to have their Michigan-issued certificate on display. Ask the agency you are working with to show you a copy of its certificate.

If you suspect that you may working with a fraudulent agent or company, the state of Michigan recommends that you contact their Office of Financial and Insurance Service’s Department of Investigation Services at 517-373-3718.

Average annual cost of auto insurance

Michigan’s 2011 average annual auto insurance premium is the highest in the nation at $2541. The national average annual premium is $1561.



Insurance Information Institute
Michigan Catastrophic Claims Association

Michigan Department of Insurance
Tel 517-335-3167