Guide to Car Insurance in Michigan

For policies issued or renewed before July 1, 2020, the minimum coverage in Michigan was bodily injury coverage, property damage coverage, and personal injury protection.

Note that, unlike medical payments coverage, PIP also includes reimbursements for childcare and lost wages.

However, things changed for policies issued or renewed after July 1, 2020. Here are the current requirements:

Not everyone is required to buy PIP, and if you are required, the minimum limits change based on you and your resident relatives’ current health insurance.

There’s no doubt that Michigan’s car insurance requirements are the most complicated in the nation, which may contribute to the state’s high insurance costs.

While Michigan’s minimum coverage covers the basics, we’d also add on uninsured motorist coverage to cover accidents with people driving without insurance, plus collision and comprehensive coverage.

While collision coverage covers your damages when an accident was your fault or if you hit a pothole, comprehensive coverage applies to damages other than collisions: natural disasters (hail, flooding, sinkholes, etc.) vandalism, and motor vehicle theft, to name a few.

See below for our recommended liability limits.

If you can’t make these limits, get as much insurance as you can afford. While you might pay more in premiums, if you have a claim, you’ll get more coverage later.

The cost of car insurance in Michigan has many people asking “why is car insurance in Michigan so expensive?”. And it’s undeniable that car insurance in Michigan isn’t cheap.

In 2020, the most recent year national data was collected, people in Michigan spent an average of $1,419 per year on car insurance, 36 percent higher than the national average of $1,047. Only Louisiana and New York had higher insurance rates than Michigan.¹

That being said, this number is just the average cost of insurance; not necessarily what you’ll pay for car insurance. The true range falls anywhere from $948 all the way up to over $10,000 for teen drivers. Many factors affect car insurance rates, so the only way you can truly know your price is to get an online quote.

If you’re shopping for auto insurance in Michigan, check out the available providers:

• Allstate
• Auto-Owners
• Farmers
• GEICO
• Hanover
• Liberty Mutual
• Meemic
• Progressive
• State Farm
• Travelers
• USAA

Although Michigan comes runner-up when it comes to highest car insurance costs, there are ways you can save.

1. Use discounts: It’s a fact that every auto insurance provider has discounts. Ask your agent how you can save money on car insurance. For example, you could save money if you’re a federal employee or a student with good grades, depending on the company.
2. Use bundles: Getting your insurance policies under one metaphorical roof will save you money, so if you also have renter’s, homeowner’s, or life insurance, bundle them under one provider with your car insurance.
3. Increase the size of your deductible: One of the deductible FAQs we get is, will a higher deductible mean lower premiums? The answer is yes, but keep in mind that you need to be able to afford your deductible. If you can’t, your coverage won’t kick in, making your car insurance a moot point.
4. Drop coverages: Although we recommend getting full coverage car insurance, you may be able to drop comprehensive coverage on an older car or collision coverage on a car in storage, for example.
5. Decrease the size of your limits: Lastly, lowering your limits will also lower your premiums but again, look past the short-term. If the injuries or damages exceed your limit, you’ll be responsible for those costs out-of-pocket.

In Michigan, it’s not only necessary to have insurance, but also proof of insurance, be it physical or digital. If you’re caught driving without insurance, you could face:

• A $200 to $500 fine
• Imprisonment of up to a year
• A license suspension of 30 days or whenever you submit proof of insurance, whichever is later
• A $25 fee to reinstate your license

Let’s dive deeper into the car insurance and driving laws in the Great Lakes state.

No-Fault State

Michigan is a no-fault state, and a unique one at that. While in all no-fault states, each party pays for its own medical expenses, in Michigan, the state covers them entirely, along with lost wages and $20 daily in replacement services, in some cases. That means that if you get into a car accident and have bodily injuries, the state will always pay for them, even if the accident was your fault.

That being said, the at-fault party will still be responsible for the other party’s property damage, and the accident victim can still sue the perpetrator for a recovery (given they meet the serious injury threshold, detailed below). The state of Michigan has modified comparative negligence laws. In English, that means that the victim can only recover money if they’re less than 50 percent at fault².

Uninsured Motorists

Aside from having the second highest car insurance prices in the country, Michigan also comes in second for the highest percentage of uninsured motorists (the two are definitely connected). A whopping 26 percent of Michigan drivers are uninsured, the Insurance Research Council estimated last in 2019³. So where does the state land regarding uninsured motorist coverage?

While Michigan requires that insurance companies offer uninsured motorist coverage, it’s not a requirement. Plus, Michigan is an “unstacked” state, which means that the number of cars on your policy won’t affect your uninsured motorist limits. In other words, you can’t “stack” coverage.

DUIs

Michigan takes DUIs seriously, as they’ll stay on your record for seven years. For the first offense, you’ll get a 30 to 180-day license suspension, with limited driving privileges after 45 days. If your blood alcohol concentration is 0.17 or higher or if you have repeat convictions, you’ll need to install a DUI interlock device for a year.

Seat Belts

Michigan has a mandatory seat belt law for those over the age of 16 and in the front seat. The law is under primary enforcement, so the police can pull you over for not wearing a seat belt solely.

Distracted Driving

In Michigan, you can make calls on a handheld electronic device unless you’re a:

• Truck driver
• School bus driver
• Teen driver with either a level one or two graduated licensing status

However, texting and driving is illegal for all drivers, as it’s one of the most dangerous forms of distracted driving. These laws, like the seat belt laws, are under primary enforcement. The fines for illegal cell phone usage include:

• First offense: $100 fine, two points for school or commercial drivers
• Second offense: $200 fine, two points for school or commercial drivers<

Teen Driving

There’s a reason that car insurance costs for teens are so high. With little driving experience, teens are more likely to get into accidents and thus, have covered claims. Michigan takes a cautionary stance when it comes to teen drivers. All first-time, licensed drivers enter their driving experience on probation for the first three years.

If they get into any crashes or receive any tickets, they’ll have to face a driver assessment reexamination, which could lead to a license suspension and/or restriction. And if those tickets or at-fault accidents fall into the last 10 months of probation, the probation will be extended for another 10 months, which must be violation-free.

Fines for teens caught using phones while driving are higher than the rest of the population. If you’re caught using a phone while driving, you could pay up to $295 in fines. However, there are a few exceptions to take note of:

• Reporting a traffic accident, medical emergency, or serious road hazard
• Reporting a situation in which you think your personal safety is in jeopardy
• Reporting a crime or potential crime against yourself or another person

In the same vein, teens have stricter DUI penalties, as well. Michigan has a zero tolerance law when it comes to consuming alcohol and drinking. For the first offense, you could receive:

• A fine of up to $250
• 360 hours of community service
• A restricted license for 30 days
• Four points
• A $500 Driver Responsibility Fee for two years

Penalties only get more severe for the second and subsequent offenses. Even possessing alcoholic beverages in your car could land you in trouble, even if they’re not opened.

Statutes of Limitations for Claims

If you have a personal injury or property damage claim, you must file it in three years, the statute of limitations for claims in Michigan.

Cancellation and Nonrenewal Notifications

Companies can’t end your coverage without notifying you first, whether it’s a cancellation or a nonrenewal.

Make sure you get a new policy before your old policy ends to avoid a lapse in coverage.

Self Insurance

Do you have more than 25 vehicles? If so, you may be able to self-insure your cars, but it’s at the discretion of the insurance commissioner, according to the Michigan Legislature.

Inspections

Unless you’re insuring a salvage vehicle, Michigan doesn’t require annual inspections or emissions tests. That being said, to get your salvage vehicle inspected, use the below contact information:

• URL: https://dsvsesvc.sos.state.mi.us/TAP/_/#1
• Phone number: 1-888-767-6424

Proof of Financial Responsibility

What happens if you don’t have insurance and you get into an at-fault accident? Michigan doesn’t require SR-22s or FR-44s, but rather, you’ll have to get a special license that demonstrates financial responsibility. Here’s everything you need to know about the Financial-Responsibility Restricted Drivers License, straight from the Office of the Secretary of the State:

• It doesn’t include a photo, unlike regular driver’s licenses.
• It specifies that you can drive in one vehicle only.
• You’ll need to file a partial-payment agreement. In this document, you’ll agree to pay a judgment, and both you and the injured party will sign it.
• You’ll also need to file proof of insurance by either mailing it to:

Michigan Department of State Driver Record Activity Unit
7064 Crowner Drive
Lansing, Michigan 48918-0001
Or, call 517-636-6406.

Defensive Driving Courses

Have you been ordered to take a defensive driving course in Michigan? You can find one here: https://www.michigan.gov/msp/0,4643,7-123-72297_30536-230768–,00.html. Just note that it has to be four hours at a minimum.

Thresholds to Sue

No-fault accident victims have the right to sue, but in Michigan, only if they have either a serious impairment of a bodily function or a serious and permanent disfigurement.

See below for the state’s car and insurance-related contact information.

DMV Contact Information

Here’s how to contact the Michigan DMV:

• URL: https://www.michigan.gov/sos/0,4670,7-127-1640_14837-380898–,00.html
• Find a self-service station: https://miselfservicestation.com/
• Mailing address:
  • Michigan Department of State
    Renewal by Mail
    7064 Crowner Dr.
    Lansing, MI 48980-0001
• Email: https://mdossupport.happyfox.com/new/

Surprisingly given Michigan’s high car insurance costs, car repairs cost nine percent less than the national average at $350.77 for parts and labor. That divides into $202.30 for parts and $148.47 for labor, if you were wondering.

Rates of car theft and the number of traffic fatalities are two of the many factors that impact insurance costs. While Michigan has fewer car thefts than the national average, traffic fatalities were higher, unfortunately.

Car Theft

According to 2020 FBI data, Michigan had 185 motor vehicle thefts per 100,000 inhabitants, 33 percent less than the rest of the U.S. This number isn’t surprising, as the Midwest in general is the safest area for car theft. Compared to the rest of the U.S., the Midwest region has 54 percent fewer car thefts.

That being said, cities like Kalamazoo and South Bend have more car thefts compared to the rest of the state. Cities have more car thefts than rural and suburban areas in general, so these increased crime rates aren’t surprising.

Traffic Fatalities

While as a whole, Michigan has few car thefts, it didn’t fare as well when it came to traffic fatalities, with 985 per 100 million vehicle miles traveled in 2019. These rates are 28 percent higher than the rest of the nation.

Still curious about auto insurance in Michigan? Read our auto insurance FAQs below for more information on driving in the Great Lakes state.