‏‏ Michigan average auto insurance rates are rising slightly, but are no longer the highest in the country - Mobilyardim

Michigan average auto insurance rates are rising slightly, but are no longer the highest in the country


The average cost of auto insurance has risen slightly over the past year as more drivers parked at home during the early months of COVID-19 got back on the road — but Michigan no longer has the highest average rates in the country.

The Zebra, a national auto insurance comparison site, calculated the average cost of buying auto insurance in zip codes across the country using publicly available rate data for its 2022 State of Auto Insurance report.

Statewide, average annual premiums in 2021 were $2,639, according to the analysis, compared to the average rate of $2,535 in 2020. Michigan was one of 38 states to see higher auto insurance rates in 2021, the report found.

In the Detroit metro area, where motorists have paid much higher costs for auto insurance, the average premium was $3,148, up 2% from 2020. By comparison, West Michigan motorists in Grand Rapids, Kalamazoo, and Battle Creek paid on average $2,462 for 2021 auto insurance.

Related: Michigan drivers get $400 per vehicle back from auto insurance costs

Historically, rates for 2021 are still lower than what drivers previously paid. In 2020, Michigan auto insurance rates fell 18% statewide and 19% in Detroit from the previous year. But Michigan drivers still pay a lot more to insure their cars compared to the rest of the US.

The national average annual premium in 2021 was $1,529. The national average is up 3% from last year, and in Louisiana, a 42% increase in average rates due to extreme weather surpassed Michigan as the most expensive state for auto insurance with an average rate of $3,265.

See how the average 2021 auto insurance premiums compare statewide by zip code:

(Can’t see the map? Click here)

Much of the increase can be attributed to motorists spending more time on the road than during the early months of the COVID-19 pandemic, when far fewer people traveled, went to work or school in person, and often used their cars. were using, said Nicole Beck, head of communications at The Zebra.

The sweeping changes made to Michigan’s auto insurance law in 2019 “probably helped” keep rates from rising more than they did, Beck said.

“The fact that it’s up doesn’t surprise us, because it’s been so low” as a result of COVID-19, Beck said. “Michigan is behind, so I think that’s a good sign that something is working there.”

Drivers in Michigan are unlikely to ever have some of the lowest rates in the country, as drivers in some states currently pay less than $1,000 a year, Beck said. But over time, she said it’s possible Michigan could boast similar rates to other Midwestern states.

“There’s really no other insurance reason why they couldn’t get the same rate as neighboring states,” she said.

Related: Why Whitmer is asking the auto insurance industry to return the ‘maximum amount’ of $5 billion surplus to drivers?

While rates in Michigan have dropped significantly since the 2019 law went into effect, experts have found that drivers in Detroit and other parts of the state with many black residents and other minority groups don’t see the same benefits as other regions.

Patrick Cooney, the assistant director of policy impact at Poverty Solutions at the University of Michigan and co-author of a recent analysis of Michigan’s auto insurance laws, said that although rates have fallen across the board, Detroit residents are still much more pay to insure their vehicles.

“We’re still seeing this difference in rates between Detroit and the rest of the state, and really between any zip code with a high proportion of black residents,” Cooney said.

Related: Michigan bans things like zip code, home ownership that affects auto insurance, now one of the strictest in the country

The 2019 law eliminated some non-driving factors that insurance companies could use when setting rates, but Cooney found that the law leaves “more than enough room” for companies to use a variety of non-driving factors, including allowing of territories instead of zip codes. used in setting rates for certain locations, he said.

One option Cooney said lawmakers could consider to make rates more equitable across the board is to require insurance companies to calculate the bulk of their rates based on three driving-related factors: mileage, driving record and years of driving experience.

“If you keep trying to block all these factors that they can’t use, it can kind of turn into a game of whack-a-mole,” he said.

Can’t see the database? click here)

Michigan drivers will see additional savings in 2022 in the form of a $400 per vehicle refund from the Michigan Catastrophic Claims Association, a legally constituted nonprofit that all auto insurers pay for personal injury protection under the auto-no-car policy. state fault system.

The refunds will apply to all cars and motorcycles insured as of October 31, 2021 and are expected to be in the hands of motorists via check or ACH deposit by May 9, 2022.

The fees collected by the MCCA are built into the premiums that motorists pay in Michigan. Under Michigan’s old auto insurance law, every driver was required to purchase unlimited medical coverage for personal injury and pay the MCCA rating, which reimburses insurers for catastrophic medical claims.

Related: Accident victims, health care providers cry angrily over imminent change in medical costs of car injuries

As of 2020, Michigan drivers can still opt for unlimited PIP coverage, but now also have the option to opt for a lower level of coverage. Now only drivers who opt for unlimited PIP medical coverage pay the MCCA assessment, as long as the fund is not in shortfall.

The most recent MCCA fee was $86 per vehicle, down from $220 in 2019 before changes to the state’s auto-no-fault policy were signed into law.

A driver’s choice of PIP coverage does not affect the refund amount. Owners of insured historic vehicles get an $80 refund, as historic vehicles are only charged 20% of the annual MCCA fee.

Beck said refunds could help “restore a little bit of confidence in the process” for consumers frustrated with paying a lot of money for auto insurance.

“How insurance should work is they are there at your worst moment,” she said. “It restores faith when they say, ‘Hey, listen, so many people have paid and not enough people have written off, let’s get back to that balance.'”

The 2019 legislation also included changes to healthcare providers’ compensation for the treatment of car-related injuries, which came into effect last year.

Insurance companies have argued that these changes are a critical part of ensuring insurance costs continue to fall, and have helped more drivers in Michigan pay for auto insurance.

The Insurance Alliance of Michigan, which represents a majority of insurance companies in the state, announced in December that more than 150,000 drivers who previously drove without auto insurance have signed up since changes to Michigan’s flawless system went into effect.

Healthcare providers say the changes have decimated their industry and put patients with catastrophic injuries at risk. An MPHI study commissioned by the Brain Injury Association of Michigan found that since reimbursements for auto-related injuries were reduced, 1,548 patients have been discharged, 3,049 jobs have been eliminated and 21 organizations that previously cared for brain injury survivors have closed.

Cooney said the University of Michigan analysis concluded that the rate caps in the 2019 law may have been unnecessarily low, noting that there are “more nuanced ways to deal with this” that would allow health care providers to continue providing care without increasing the rates. to drive.

In a December interview with reporters, House Speaker Jason Wentworth, R-Farwell, said he’s open to adjustments, pointing to a $25 million legislator-approved pot for post-acute brain and spinal cord injuries and accompanying caregivers who see structural losses as a result. of the new law. But he added that major changes could cause rates to creep back up.

“Any change in the law will lead to a reduction in that scrutiny that drivers will see,” said Wentworth, who played a key role in guiding the legislature’s changes to auto insurance. “Everything we do will have that cause and effect on that control.”

Related Coverage:

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Accident victims, health care providers cry angrily over imminent change in medical costs of car injuries

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What to Look for When Buying Car Insurance in Michigan

Will Michigan drivers change their policies once the new auto insurance law goes into effect? Many still don’t know

Why It’s Difficult To Predict Individual Savings Under The New Auto Insurance Act

Michigan auto insurers see ‘coronavirus windfall’ as driving, accidents are decreasing

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