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Auto insurance rates expected to rev up in Michigan this year

Experts say rising auto insurance rates tied to inflation
Posted at 10:49 PM, Mar 08, 2022
and last updated 2022-03-08 22:49:48-05

(WXYZ) — Drivers in Michigan are getting ready to brace themselves as auto insurance rates are set to increase this year across the state.

According to experts, many insurers are boosting premiums in the double-digits. They say the rising rates are a result of inflation as businesses try to compensate for higher costs.

Fellow Detroiters Mark Morgan and Capri Murrell are not related to each other, but they’ve got one thing in common, paying around $200-$250 a month for car insurance.

They are like other car owners feeling the heat.

"In other states, I’ve heard that they are as low as $35 a month. I think that is very affordable for something that you are requiring people to have," said Murrell.

Despite reforms, Michigan drivers are still paying among the highest rates in the nation.

Source: The Zebra

The Zebra State of Auto Insurance 2022 study shows Louisiana and Michigan are the only states with an average premium of over $2,500.

What’s more, in the top 10 expensive cities for auto insurance, Detroit took the lead, followed by River Rouge and Dearborn ranked 9th and 10th respectively.

Source: The Zebra

Rod Griffin from Experian says this is all thanks to inflation and the supply chain shortage.

"Cars are costing more and as a result, insurance rates are reflecting that as well. Car parts cost more to buy and replace and to repair, that also drives insurance rates as well," said Griffin.

Insurance expert Ken Cantor says this year drivers can expect to fork out 6 to 15 percent more on premiums.

"They use a lot of different online sources when they are rating analytics to evaluate the risks, and one of those things is crime score and prior losses and things of that nature," said Cantor.

RELATED: Michiganders could get $400 auto insurance refund checks starting this week

Compared to other states, credit scores and marital status don’t directly affect rates in Michigan, but your driving record, payment history, and age play a role.

"Older drivers are rated higher," said Cantor.

He says Michigan’s policy change back in 2020 was also misleading. The public was told unlimited Personal Injury Protection was behind expensive premiums. However, in reality, it didn’t impact the rates a lot, but left folks in a dicey situation.

"They are lowering certain limits in medical care under PIP and at the same time, when those limits run out here, they have to go to their health carrier," he said.

To make matters worse, many people are defaulting on their auto insurance payments because they just can’t afford it.

"They drive without coverage," said Cantor.

Source: The Zebra

Driving without insurance is not only against the law but is extremely dangerous as any kind of accident would result in a heavy financial burden. So, what can you do besides shopping around?

"Drive safely, don’t have accidents, and don’t get tickets, it's that simple," said Cantor.

Cantor also recommends going with an insurance broker, because if things go south, you will have someone that’s got your back.