How to Find Affordable Car Insurance in Michigan
Finding a bargain on car insurance in Michigan is going to be tough. Michigan has the most expensive car insurance rates in the whole country. Michigan’s average auto insurance rate is $3,096 per year, which is twice as much as the national average of $1,548.
Why Has Auto Insurance in Michigan Been So High?
There was a law that required all drivers to buy unlimited, lifetime medical coverage for car accident injuries. This led to costly medical claims, fraud and legal battles among insurers, medical providers and policyholders over what was covered and how much it would cost.
New Car Insurance Law in Michigan
But thanks to a new law that took effect in July 2020, drivers have a choice about the Personal Injury Protection (PIP) coverage that they choose. They can still buy the unlimited option if they wish, but they have other options as well.
They can choose a PIP that covers car accident injury expenses up to $500,000, a PIP that covers car accident injury expenses up to $250,000, and a PIP that covers car accident injury expenses up to $50,000. For the $50,000 coverage option, you will need to be enrolled in Medicaid and meet other eligibility requirements.
They can opt out of PIP if they have Medicare or a qualifying health insurance plan that covers car accident injuries.
Banning of Personal Information
On July 2, 2020, Michigan banned the use of certain personal information from auto insurance pricing including gender, marital status, occupation, education, zip code, credit score and residential status, which is whether you rent or own your home.
Insurers will still be allowed to use some credit information such as a driver’s payment history.
New Liability Coverage
If you ever cause a car accident, liability insurance pays for the other person’s injuries and property damage, up to your liability limit.
After July 2, 2020, Michigan drivers were offered a default minimum liability coverage of $250,000 for one person injured or killed in an accident and $500,000 for accidents with two or more people.
Michigan drivers will be allowed to request that those liability levels drop to $50,000 and $100,000 respectively.
Approval of New Auto Insurance Rates
Starting on July 2, 2020, Michigan’s state insurance regulator must approve new rates before insurance companies can start charging the new rates to customers.
How to Save Money on Car Insurance
The people of Michigan are definitely looking for a deal when it comes to car insurance. Here are some tips and strategies for lowering that auto insurance premium. Use as many as you can to save money.
Follow the rules. If you are a safe driver that follows the rules of the road, you will save money on your car insurance. Break some rules and you will see your car insurance premium go up and up. So avoid speeding tickets, DUIs, at-fault accidents, all these things will lift up your premium. Drive safely and responsibly instead. If you have been a good driver, let your insurance company know. You’re entitled to a good driver discount.
Pay once or twice a year. Rather than paying monthly auto insurance bills, pay the entire annual amount or six-months amount. Your auto insurance premium is lower when you pay just once or twice a year.
Use a multi-car discount. Insure more than one car with the same insurance company and you will save money on your auto insurance premiums.
Try bundling your policy. Bundle your auto insurance policy with another insurance policy such as homeowners insurance and you will save money on your car insurance.
Check your age. Drivers younger than 25 and older than 65 have more serious car accidents and pay more for their insurance. Drivers of the ages in-between pay less for their car insurance.
Pay your bills on-time. Michigan banned using credit scores in determining auto insurance rates but it did allow insurers to use a driver’s payment history. So paying your other bills on time will help to lower your auto insurance rates. If you are behind on your bills, catching up and getting current will help your credit score and give you lower car insurance rates.
Drive low miles. Want to save money on your car insurance? Drive less. Low-mileage drivers pay less for their car insurance than heavy commuters who rack up the miles. So drive less and pay less on your auto insurance.
Choose a high deductible. A deductible is the amount you need to pay before an insurance company begins to pay for damages to your car or losses. Choosing a high deductible will lower your auto insurance premium, especially with newer cars. Just be sure to put the deductible amount in a small emergency fund. That way the money will be there should you need to file an auto insurance claim.
Check for discounts. As mentioned earlier, good drivers deserve discounts. So if you are a good driver be sure to ask for one. Veterans and students may be eligible for discounts as well. So if you are veteran or a student be sure to reach out to your insurance company. You deserve a discount, too.
Less insurance for older cars. Collision insurance is coverage that helps to repair or replace your car if it’s damaged in an accident with another car or object such as a tree or a fence. Comprehensive auto insurance covers events that aren’t covered in collision coverage. These events include vandalism, fire, theft and damages from weather such as a tornado, a hurricane, a windstorm and a hail storm.
If you have a loan out on your car, your lender may require you to carry both collision insurance and comprehensive insurance.
But once a car is paid off and it gets older you may not need these coverages any longer. The maximum payout for comprehensive and collision coverage is limited by the value of the car. So if your older car has a low market value, it may not make financial sense to carry comprehensive and collision coverages any longer.
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