LANSING – Michigan is no longer the most expensive state in the nation for auto insurance and hasn’t been for several years thanks to the 2019 bipartisan reforms that cracked down on fraud, reined in rampant overcharging by medical providers and offered consumers more choices. The new ranking is according to a recent analysis by Bankrate.
But Michigan law still requires that our residents purchase some of the highest auto insurance policy coverages in the United States.
“Compared to the rest of the country, Michigan still requires the majority of its residents to buy a minimum of $250,000 in PIP, which is five times higher than any other state,” said Erin McDonough, executive director of the Insurance Alliance of Michigan (IAM). “The historic, bipartisan auto no-fault reforms continue to curb costs for Michigan drivers, including allowing residents to choose a level of PIP other than unlimited for the first time, but for most those levels are far beyond other states’ requirements.”
Only 13 states require residents to buy PIP through their auto insurance policies, while 26 states don’t require drivers to purchase any medical coverage at all as part of their auto insurance. Michigan’s lowest available limit for most residents is $250,000 per person/per accident, although some on Medicaid can now access a $50,000 per person/per accident limit, and some can opt out entirely after meeting certain requirements.
Compared to other states, New York has the closest minimum PIP limits to Michigan at $50,000, followed by North Dakota at $30,000, Minnesota at $20,000 and New Jersey at $15,000. Please see the attached chart for a state-by-state analysis of PIP limits and Bodily Injury Liability (BI) requirements.
Prior to the 2019 reforms, the minimum BI limits in Michigan were $20,000 per person/$40,000 per accident, which aligned with the rest of the nation. As part of reforms, those limits increased to $50,000/$100,000, but drivers default to $250,000/$500,000, regardless of whether that coverage fits their needs. It also requires affirmative selection at every renewal, which creates a difficult paperwork process and can be a burden for the consumer.
“We should allow consumers to choose lower PIP and BI limit options that are more in line with other states,” McDonough said. “And we should make it easier for consumers to access those choices. While the reforms definitely helped rein in rising costs, more can be done to save money for Michigan drivers when the high cost of everything continues to be a burden for families.”
Please review your auto policy selection carefully and talk to your agent to make sure you understand all the options available to you and your family. Shopping around is another great way to make sure you are getting the best deal. To learn more about the Insurance Alliance of Michigan, visit the IAM website.
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