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New report details Michigan’s high cost of car insurance

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With Detroit leading the way

Photo by Michelle & Chris Gerard

It’s no secret that Michigan has the highest car insurance rates in the nation, and that Detroit has the highest rates in Michigan. They mayor recently sued the state in an attempt to lower prices. Will the upcoming gubernatorial election affect rates in Michigan? A new report aims to explain how the problem got this way and what the candidates intend to do about it.

The Zebra, an “auto insurance search engine and consumer educator,” has collected data from Michigan and in a new report, details the history of the problem, the costs, and what could come next.

Because Michigan requires Personal Injury Protection (PIP) coverage, and because personal injury claims can often be inflated—among other reasons—Michigan’s rates have skyrocketed in the past decade.

On average, Michigan drivers pay over double what drivers in nearby states pay.

Courtesy of The Zebra

The report also highlights how much income drivers pay on average. In Michigan, drivers pay about 4.75 percent of their income on car insurance. In Detroit, which has a very high poverty rate combined with an average insurance cost of $5,414, the income percentage is 20 percent—for car insurance.

In Michigan, and especially in Detroit, this can lead to many going uninsured.

Courtesy of The Zebra

The report argues that the high rates are prohibitive in attracting new talent to the region. We’d add that a lack of public transit paired with the high insurance rates is hurting the region as a whole.

What can be done about it? According to this report, limiting the medical benefit and creating a medical fee schedule are top priorities. Discriminating against zip code and creating a more level cost across the state could also lower costs.

High insurance costs have been debated for years, and it’s something Mayor Mike Duggan has said is a priority for the city and a ‘civil rights issue’.

The full report can be found here.