Why are Michigan car insurance rates highest on average?

Michigan Car Insurance According to a new national survey conducted by Insure.com, Michigan is home to the highest average car insurance premiums in the U.S., followed closely by Louisiana and Oklahoma. Insure.com compiled data from six of the largest auto insurance providers in the nation and more than 2,400 vehicles from across 10 zip codes in each state. The company conducts this survey annually and lists the results for all to see on their website.

The average yearly premium for car insurance in Michigan rose by $443 according to the survey, up from last year. Louisiana previously held the first place position but has been overcome by Michigan’s climbing rates.

The main reason Michigan has risen to the top slot, according to Insure.com, is because it is the only state that guarantees unlimited personal injury protection payments to those injured in accidents. On average, Insurers in the state pay up to $480,000 in PIP benefits. Auto insurers are also mandated to pay for up to three years of lost wages and replacement services.

Jon Spalding, president of the Michigan Professional Insurance Agents Association, holds that the higher rates are due to some peculiarities in state insurance laws. Motorcycles, for instance, are not considered motor vehicles in Michigan, so drivers only need to purchase liability coverage in case they insure someone. As long as they pay for the coverage, they are still able to collect unlimited medical benefits in they are injured in an accident that involves a car.

“If a motorcycle ran into me from behind,” explains Spalding, “my insurance would provide medical benefits for them.”

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