What you need to know about buying car insurance in Michigan

Drivers in the Great Lakes State pay $2,352 per year for full coverage, considerably more than the U.S. average of $1,897. You won’t save much by picking a state-required minimum liability plan, which is $654 yearly versus the national average of $503.

“Michigan has comparatively high required liability limits as part of its no-fault insurance system – which is a significant factor in the state’s relatively expensive car insurance rates,” says Steven Kibbel, a certified financial planner. “Being a no-fault state requiring mandatory personal injury protection (PIP) coverage, along with having a significant number of uninsured drivers in the state, contributes to higher premiums.”

If you have a clean record, you may be able to find cheap car insurance. But even the least expensive insurer in our analysis, Geico, has rates above the national average.

Key highlights

• Full coverage auto insurance in Michigan is typically 19% higher than the national average cost, while a minimum liability-only policy is around 23% more than the average nationwide.
• Michigan drivers must also carry personal injury protection (PIP) and additional liability insurance for property damage.
• On average, Geico and Travelers have the cheapest rates, while State Farm and Michigan Farm Bureau are the most expensive.
• Among Michigan’s major cities, Ann Arbor and Lansing residents have the cheapest car insurance rates, on average. Dearborn and Detroit drivers pay the most.

Understanding car insurance requirements in Michigan

You’ll need to have minimum liability coverage in Michigan, just as you do in nearly every other state. Here, you must have at least a 50/100/10 policy that breaks down as such:

• $50,000 for bodily injury per person per accident
• $100,000 for total bodily injury per accident
• $10,000 for property damage liability outside of Michigan

Unlike most states, the liability portion of your insurance policy only covers property damage you cause outside of the state. To cover property damage you cause within the state, Michigan drivers must also carry property protection insurance (PPI), which offers up to $1 million of coverage.

Finally, drivers must carry personal injury protection (PIP) insurance to cover the injuries they and their passengers sustain in an accident, regardless of who is at fault. Coverage levels can vary from none to $250,000 if you have a qualified health plan such as Medicare or Medicaid, or from $250,000 to unlimited.

Because Michigan’s no-fault insurance laws are so complex, it's a good idea to speak with a licensed insurance agent to determine the ideal PIP coverage.

Also, remember that to register your vehicle in Michigan, you must provide proof of valid auto insurance. Failing to do so could result in the DMV suspending your registration, leading to extra penalties if you need to reinstate it.

Average cost of car insurance in Michigan

Wolverine State drivers pay more for car insurance coverage than many people in other states. Consider that the average full-coverage policy in Michigan is $2,352 annually. That’s $455 higher than the national average of $1,897. If you pay monthly premiums instead, your Michigan full-coverage policy will likely be $38 higher than the national average price tag ($196 versus $158, respectively).

“The expense of auto insurance in Michigan is influenced by different factors, such as rising replacement costs, more litigated claims, accident severity and frequency, higher medical costs, more extreme weather events, and a high number of uninsured motorists,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute (Triple-I), an industry research and education organization.

“However, we are actually seeing pricing improvements in Michigan due to legislative reforms passed in 2019 and implemented in 2020. This has led to a decline in uninsured motorists in the state. In 2019, Michigan had the highest uninsured motorist rate in the country.”

A state minimum liability policy costs an average of $654 yearly in Michigan; compare that to the national average of $503. Bump up your liability policy from a 50/100/10 to a 50/100/50 and the average price jumps to $694 annually.

These rates are sourced from CarInsurance.com and reflect a full-coverage policy with liability limits of 100/300/100 and a $500 deductible for both comprehensive and collision coverage. The rates apply to a single 40-year-old driver with a clean driving record and good insurance score, driving a 2023 Honda Accord LX.

How to find cheap auto insurance in Michigan

There are plenty of ways to pay less for a car insurance policy in Michigan. Your key to savings starts by gathering rate quotes from several different auto insurance companies and carefully comparing offers.

“It’s also possible to save money by increasing your deductibles or opting for lower coverage limits,” says Katie Ekstrom, associate vice president of product development, national auto, for Travelers Insurance. “Additionally, try to bundle multiple policies, enroll in a telematics program that tracks your driving habits, inquire about a safe driver discount, and seek good student incentives if you have a student in the family.”

Ekstrom recommends consulting with a local independent insurance agent to help you find coverage that meets your needs and budget.

Car insurance rates, by company, in Michigan

No carrier charges the same rate in Michigan, which is why it pays to shop around for an auto insurance policy. Geico has the cheapest premiums on average, $1,553 per year or $129 per month), while State Farm is the most expensive, $3,698 annually or $308 monthly.

Comparing car insurance quotes in Michigan

To help you understand how your specific circumstances might impact your insurance quotes, here are the average auto insurance rates in Michigan:

Michigan car insurance cost by city

Insurers consider several factors when setting rates, including where you live. In Michigan, Ann Arbor residents pay the least, $2,119 annually, $233 less than the state average of $2,352. Dearborn drivers pay the most on average, $3,305 per year.

Frequently asked questions

How can I save on car insurance in Michigan?

It’s a good idea to comparison shop at least once a year because coverage needs can change over time, especially f you’ve purchased a new vehicle, moved to a new address, or experienced a major life change. Experts recommend getting quotes from at least three insurers.

Don’t overlook the additional savings you could earn from common car insurance discounts like bundling auto insurance with a home or renters policy, paying your bill upfront, choosing paperless billing, insuring multiple vehicles under one policy, and maintaining a clean driving record for at least three years.

Is Michigan a no-fault state?

Michigan is a no-fault state, one of about a dozen in the U.S. In these states, drivers must have personal injury protection (PIP) insurance to cover essential medical costs for themselves and their passengers, regardless of who is at fault in an accident. Unlike other no-fault states, Michigan requires relatively high amounts of PIP coverage, ranging from $250,000 to unlimited for most drivers, which is one reason why the state ranks among the most expensive for car insurance.