Why are Michigan auto insurance rates so high?
Michigan drivers face high auto insurance rates due to the state’s high insurance requirements, high percentage of uninsured drivers, and increased risk of auto theft.
Although Michigan has a lower cost of living than most states, drivers in the Great Lakes State tend to pay significantly more for car insurance than drivers in other parts of the country. Drivers in Michigan pay an average of $214 per month for full coverage — more expensive than the national average of $182.
Michigan car insurance rates increased significantly between 2023 and 2024, and the state remains one of the most expensive for auto coverage.
Learn why Michigan is so expensive for car insurance and what you can do to reduce your premiums.
How Michigan car insurance rates have increased
Michigan is one of the least affordable states for auto insurance, according to the Insurance Research Council.1 But recent auto insurance reform measures have improved the affordability of car insurance.
In 2014, Michigan ranked as the second-most expensive state for car insurance. Michigan lawmakers passed reform laws that went into effect in 2020. Since then, Michigan’s insurance industry has improved, and now five U.S. states have more expensive average coverage than Michigan.
Factors in Michigan causing higher car insurance rates
Michigan has higher average car insurance rates for a few different reasons. Learn more about each factor below.
High minimum coverage requirements
In nearly every U.S. state, drivers legally have to have policies that meet minimum bodily injury and property liability coverage requirements. To meet the state coverage requirements, Michigan drivers must carry $50,000 per person and $100,000 per accident in bodily injury liability coverage and $10,000 in property damage for out-of-state accidents.
Michigan is a no-fault state, so your insurance will kick in regardless of who caused the incident. As a result, the state has additional requirements that increase the cost of coverage:
High percentage of uninsured drivers
Michigan has a significantly higher-than-average percentage of uninsured drivers. Approximately 20% of drivers in the state don’t have coverage. Because of the state’s high number of uninsured drivers, Michigan insurance companies are more likely to have to pay for accident-related costs. To compensate for the increased risk, insurance companies may increase the rates for insured drivers.
Lawsuits are more common in Michigan
Lawsuits in the state also influence insurance costs for Michigan drivers. The state has a higher lawsuit rate for private passenger auto claims than other states; with more lawsuits, insurance companies have to increase their rates to offset increased litigation costs.
High risk of theft
Vehicle thefts within the state increased 56% between 2019 and 2023, according to the Michigan State Police.3 With more vehicle thefts occurring, insurance companies are likely increasing the average cost of comprehensive insurance — the coverage you need to protect your vehicle against theft or vandalism — due to the increased risk.
Factors that affect your car insurance premium
Unlike many other states, Michigan insurance companies legally can’t consider your credit score as part of the underwriting process.4 Learn about the factors that can affect your rates below.
Age
Teens and drivers in their early 20s are statistically more likely to have car accidents due to their inexperience behind the wheel. As a result, younger drivers typically pay higher rates than other age groups.
Below, you can compare average car insurance rates in Michigan for each age group:
Location
Where you live plays an important role in determining your rates. People who live in more densely populated areas or ZIP codes with higher levels of crime pay higher rates because of the increased risk of accidents or theft.5
Detroit is among the most expensive cities for car insurance in Michigan due to its high crime rate and population density.
Below are the rates for the most expensive cities in Michigan:
Driving record
If you have a history of speeding tickets, accidents, or other driving infractions, insurance companies see those issues as an indication of future claims. People with driving infractions pay higher rates for coverage than people with clean driving records.
Make and model of your car
The cost of your car and average repair costs also affect your car insurance premium. Higher-value cars and vehicles with a higher risk of theft tend to cost more to insure.
Vehicles with top safety ratings, such as the Subaru Forester, Subaru Outback, and the Honda Odyssey, tend to be cheaper to insure.
How to lower your car insurance rate in Michigan
Although car insurance in Michigan can be quite expensive, you can use several strategies to reduce your insurance premiums:
Why car insurance is so expensive in Michigan FAQs
As you shop for coverage in Michigan, the following information can help you secure the right insurance at the best price.
How much is car insurance per month in Michigan?
The overall average cost of car insurance in Michigan is $178 per month. Michigan drivers pay an average of $214 per month for full-coverage insurance and $142 for state-minimum coverage.
What is the cheapest car insurance in Michigan?
In Michigan, USAA offers the lowest car insurance rates. Liability insurance policies from USAA average $61 per month.
What is the minimum car insurance required in Michigan?
In Michigan, drivers must have policies that include $20,000 per person and $40,000 per accident in bodily injury liability coverage and $10,000 per accident in property damage liability.
The property damage liability only covers damages you cause in another state.
For damages that occur in Michigan, drivers need to carry up to $1 million in property protection insurance (PPI). Lastly, Michigan drivers need to purchase personal injury protection (PIP) for medical expenses and up to three years of lost wages.
When did no-fault insurance start in Michigan?
Michigan instituted no-fault auto insurance in 1973. Under its no-fault insurance laws, drivers must have personal injury protection, property protection, and residual liability coverage.
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