Michigan Car Insurance: A guide for 2019
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From Detroit, the seat of the automotive industry, you can cross the Mackinac Bridge to the forests and mountains of the Upper Peninsula, or stay amongst the flatlanders in the Mitten and enjoy the view of over 11,000 inland lakes. Although Michigan has a rich history in the automobile industry, it also has some of the highest average car insurance premiums in the nation. So before you set out to drive in the Great Lake State, take time to find affordable coverage.
OnlineAutoInsurance.com can help Michigan residents find the coverage you need at a price you can afford by allowing you to compare Michigan auto insurance quotes online from multiple companies. But before you get started, learn the state’s requirements and find out what other policies you might need.
Michigan No-Fault Insurance: State Minimums
The Michigan auto insurance laws make it mandatory for every vehicle to have a no-fault policy, which is divided up into three parts:
Personal Injury Protection
(PIP) Personal injury protection pays for all of the policyholder's bodily medical costs that are the result of an automobile accident, with no maximum limit. It will also pay up to three years of lost wages due to your injuries.
Personal Protection Insurance
(PPI) Personal protection insurance pays for any damage to other people's property that the policyholder is at fault for in the state of Michigan. This coverage pays up to $1 million.
Residual Bodily Injury and Property Damage Liability
(BI/PD) Residual bodily injury and property damage liability pays for court defense costs and/or damages you are found liable for as a result of an automobile accident up to the policy limits. The minimum coverage required is $20,000 per person, $40,000 per accident with multiple injuries, and $10,000 total for out of state property damage. These policies will only come in to play in instances where the other party is allowed to sue, or if the other car is from out of state, or the accident occurs in another state.
Penalties for not having the minimum required coverage include a fine of up $500 and up to a year in jail. You may also have your license suspended for 30 days or until you can provide proof of insurance.
The above coverage is only the minimum requirement. Before you begin comparing car insurance, you should consider purchasing additional policies. No-fault policies will not help you pay to fix your vehicle if you are in an at-fault accident. And if you spend very much time driving out of state, you might consider raising your Residual BI/PD limits, as they can easily be exceeded in a serious accident.
There are a few other policies worth considering that will leave you covered in instances beyond the scope of your no-fault insurance policy. It’s worth noting that if you’re still paying off your vehicle, you will be required to carry Collision and Comprehensive coverage. But even if it’s not required, it can save you from having to repair or replace your car out of pocket in the event of a serious collision.
Collision Coverage this policy will cover the cost to fix your vehicle or to replace it if it’s totaled, no matter who is responsible. The policy’s deductible only applies if you are substantially at fault, so you can save money and protect your car by raising the deductible, as long as you can afford it when it does apply.
Comprehensive coverage pays for damages caused by events out of your control, like fire or storm damage. It will also pay to repair your car if you collide with an animal or if your car is stolen or vandalized. Drivers should be aware—snow is not considered an act of god. Remove snow and ice from your windshields, headlights, taillights, and the hood, trunk, and roof of your car. It’s the law.
Uninsured and underinsured motorist coverage will pay for injuries you sustain if you’re hit by an uninsured motorist, or if the driver’s maximum limits max out before all the damages you were awarded in court are paid. This policy only comes into play when circumstances allow you to sue the other driver, or in a collision with an out of state driver. This policy will apply for any property damage.
Auto-rental will reimburse you on rentals when your car is in the shop, and Roadside Assistance will help you if you need a jump, run out of gas, or need a tow for any reason. You may have similar coverage through your car dealership or credit card, and there’s no reason to pay for them twice.
Why is Michigan car insurance so expensive?
There are a number of factors that make coverage in Michigan so expensive. A lot of urban areas with high traffic and high claims rates play a big role, as does the state’s relatively large number of uninsured drivers. Insurance fraud and people who view car insurance claims as opportunities also raise your rates. But the main factor is the high dollar amounts your policy may be required to pay to settle your claims, and the fund designed to help insurance companies meet these strict requirements.
When Michigan enacted no-fault laws that promised unlimited lifetime coverage for medical bills due to a car crash, they set up the Michigan Catastrophic Claims Association. When your insurance company pays out catastrophic claims, they are reimbursed any amount over $580,000 from this fund. The MCCA is funded by an annual fee that is currently $220 for every insured driver.
The Michigan legislature recently took a big step towards cutting the cost of car insurance for residents. Starting in July 2020, unlimited PIP will no longer be required, and some drivers are eligible to opt-out entirely. In addition to reduced PIP premiums, the MCAA fee has been reduced to $100. While it remains to see how much this will help you save on your annual premiums, it’s hopeful that a bipartisan effort is in progress to reduce the costs of car insurance.
Finding the best deal on car insurance
Your car insurance premiums are determined by a number of personal factors, as well as the kind of vehicle you drive and how much you drive it. Because these factors are weighted differently from one company to the next, no one insurance company will offer the best rates for everyone.
Combine that with the various discounts each company offers to entice the target demographic, and it’s impossible to know which company is right for you. Asking your friends won’t cut it when you’re shopping for a policy.
Comparison shopping is essential to find the best deal on car insurance. You should obtain as many quotes as possible before making a purchase to ensure you get the best deal. For more information and tips, take a look at the Consumer's Guide to No-Fault Automobile Insurance in Michigan.
The bottom line
Once you understand the state’s insurance requirements and decide the level of coverage that’s right for you, you can begin comparing car insurance quotes online. You can experiment with different levels of coverage to see what’s in your budget. But don’t sacrifice coverage you need to save money—if you can’t afford an accident, you can’t afford to skimp on insurance!
Once you’ve found the policy that’s right for you, you can make your purchase online and have proof of insurance within minutes. Even if you already have insurance, you can save a lot of money by switching providers, and there’s never any obligation to buy. So what are you waiting for? Fill out the form and start comparing rates immediately.