Michigan Car Insurance

Last Updated on September 29, 2020 by Andrew Lee

All car owners in the State of Michigan have to carry an automobile insurance policy, as the law requires them. However, you should consider it more as an investment rather than just another expense, as it will protect you from financial liabilities in the event you find yourself involved in a road accident. To make certain you comply with the Michigan car insurance laws, here are the most important facts you need to know about them.

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The average cost of car insurance in Michigan

The National Association of Insurance Commissioners (NAIC) claims that the average person pays roughly $1,131.40 for car insurance in Michigan each year.

They broke this figure down to:

$742.31 is the average annual liability insurance expenditure.

$377.45 is the average annual collision insurance expenditure.

$144.45 is the average annual comprehensive insurance expenditure.

Young Drivers in Michigan

Our case study shows that in the Great Lakes State, young drivers can an average of:

  • $3377.6 for state minimum coverage
  • $5377.6 for basic full coverage
  • $6738 for premium full coverage

One of the major reasons behind these high insurance costs is because insurance companies regard young drivers as high-risk. Historically, inexperienced motorists have caused the greatest number of road accidents. You can still cut back on your premiums though, once you have shown your insurer you drive safely and prudently.

Female Drivers in Michigan

Our study found that a female driver can expect her premiums to have the following annual averages:

  • $1771.2 for state minimum coverage
  • $2684.8 for basic full coverage
  • $3295.6 for premium full coverage

Based on our methodology, we found that for state minimum coverage, women in Michigan pay $1,606.40 less than male motorists aged 20. They also pay $2,692.80 less for basic full and $3,442.40 less for premium full.

Senior Drivers in Michigan

The results of our research show that senior drivers can expect these following yearly premium averages:

  • $1772.8 for state minimum coverage
  • $2531.6 for basic full coverage
  • $3073.6 for premium full coverage

Motorists falling under this category can find a monthly coverage for as low as $98. Based on the results of our study, we found that Grand Rapids, with an estimated population of 195,097 (2015, latest data) offers the lowest possible monthly insurance cost of about $61.

Minimum car insurance requirements

Michigan is one of the 12 states in the country implementing no-fault car insurance laws. When you purchase a no-fault auto insurance program, it will comprise of three different coverage types, namely: Personal Injury Protection (PIP) coverage, property protection coverage, and residual bodily injury/property damage liability insurance.

The PIP portion of your policy will cover you for medical or hospital expenses brought about by injuries you may sustain after getting involved in a traffic accident. In the event that your injuries hinder you from going to work, this will also provide up to 85 percent coverage of what you usually earn. It does have a limit of $5,392 monthly for up to three years, though.

The second coverage Michigan state law requires you to have in your motor vehicle insurance policy is Property Protection (PPI). This covers up to $1 million worth of property damage you caused to the property of other people. It does not cover the damages brought upon to another person’s car (mobile) in an accident though.

Last but not least is the residual bodily injury/property damage liability insurance. The state’s law requirements here serve as a barrier for the insured person against legal liabilities, with a few exceptions. For instance, the accident you caused resulted in someone sustaining severe injuries or a person dying; or the accident involves a non-Michigan resident operating a non-Michigan-registered automobile. You need to meet the following minimum requirements: $20,000 for injuries to an individual (including fatalities); $40,000 for injures per accident to more than one person (including deaths); and $10,000 for property damage (for accidents wherein the other involved parties do not live in the state).

Collision car insurance, comprehensive coverage, uninsured/underinsured driver coverage, towing and labor coverage, as well as rental car coverage, are also available add-ons in policies in the state.

Violations and penalties 

Violating the strict Michigan car insurance laws will result in serious penalties. These usually take the form of fines and suspensions.

When the authorities determine you do not have car insurance, you can expect to pay around $200 to $500. They may also imprison you for up to a year. Your license will remain suspended for up to 30 days, or unless you provide proof you already purchased insurance. To reinstate your license, a fee of $25 dollars applies.

Driving safety in Michigan

As Centers for Disease Control and Prevention (CDC) cited, 94% of drivers and front-seat passengers wear seatbelts in Michigan. This is higher than the national average of 86%.

The National Highway Safety Administration also stated that 963 driving fatalities took place in MI in 2015. 267 of them (28%) were caused by drivers under the influence of alcohol.

This number puts the total vehicle occupant death rate in the state at 6.2 per 100,000 residents, as CDC further reports.

Final thoughts

Although you already know you should drive as safely as possible, accidents can still happen no matter what. However, you don’t have to worry about hefty after-accident expenses, as long as you comply with the Michigan car insurance state laws.

Source: StatistaInsurance Information Institute