Profitt Report: Michiganders pay more for auto insurance than any other state, survey says

Photo credit: MGN

You pay for regular car maintenance, gas but maybe one of the more painful vehicle expenses is auto insurance. On average, Michigan holds the title as the most expensive state in the country for auto insurance premiums. according to an analysis from the rate-comparison website, the Zebra.

We spoke with Alyssa Connolly with the Zebra on Skype and she said there are a handful of reasons we’re paying more than anyone else in the country. For one, our weather extremes and our urban areas with more people and therefore more crashes and crime.

However, they say the biggest culprit: our no-fault law.

Cindy Sherry of Flint says she’s ready for a new car because hers is getting up there, it’s about 10-years-old.

“But I can't afford a car payment and the car insurance,” she said.

Michiganders on average pay more than $2,600 every year in auto insurance premiums according to the Zebra. Compare that with the least expensive state, North Carolina, where they pay $865 on average.

“I’m not sure about no-fault, I don't know. So many people go without insurance because of that,” Sherry said.

It’s against the law for Michiganders to drive without no-fault insurance. If you’re in an accident, no-fault pays for your medical expenses, wage loss benefits and the damage you cause to other people’s property. It does not pay for your vehicle repairs.

In Michigan, this personal injury protection is unlimited where every other state with no-fault has a cap. Connolly said because of this, the bills can be charged for years on end.

"Doctors, they might just continue to, you have a lot of expenses, they can make more money off of it so you see a lot of fraud because they're able to keep saying, 'OK, car insurance companies, you are going to be paying for this,' because there's no limit to this," she said.

Because rates are so high, people are dropping their insurance.

“Then you get into a collision with an uninsured driver, your insurance has to cover that, too. Somebody’s got to pay for it, be responsible, so they raise the rates for you as well,” she said. To learn more about the Zebra's survey, please click here.

So: what power do we have over how much we pay? Insurance agent Dave Walker at Hartland Insurance in Flushing said first, know what goes into calculating your rate such as your credit score. If your credit has improved recently, let them know, it could save you money.

“They don't check that every year, they typically only check it every three years. As a consumer, you can ask them to recheck it annually,” Walker said.

Next, look at how you use your insurance. You have a premium, or how much you pay every month, and a deductible, how much you’ll pay out of pocket when making a claim. If you aren’t using that deductible very often, Walker said go for a higher deductible and lower premium.

“Pay for the large deductibles, pay for the discount of a large deductible. That saves you that money over that period of time,” he said.

There are efforts to repeal the no-fault law – Detroiters for Change wants to remove credit score as a factor to set your rate and more options for drivers.

On the other hand, the Coalition Protecting Auto No-Fault in Lansing wants to keep this law in place. They say it protects car crash victims with catastrophic injuries, giving them the care they need.

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