Guides
Why Michigan car insurance costs what it does
Michigan's no-fault system, unlimited PIP and MCCA fee made it one of the costliest states. What the 2019 reform changed and the choices that set your price.
Michigan car insurance has been expensive mainly because of its no-fault insurance system: until 2020 every driver had to buy unlimited lifetime medical benefits for crash injuries, and every policy paid a large per-car fee to fund catastrophic claims. The 2019 reform let drivers choose lower personal injury protection limits, capped what medical providers can charge, and banned several non-driving rating factors. Prices fell, from the second most expensive state in 2019 to 12th in 2023 by NAIC figures, but Michigan remains above the national average.
Where Michigan ranks
The NAIC Auto Insurance Database Report shows Michigan's average expenditure per insured vehicle falling from $1,498.59 in 2019 (second highest in the country) to $1,341.78 in 2021, before rising with national inflation to $1,444.01 in 2023 (12th, against a U.S. average of $1,281.92). The change shows up in liability coverage, which in Michigan includes PIP: the average liability premium fell from $981.16 in 2019 to $765.72 in 2023, while collision and comprehensive premiums rose with repair costs, as they did everywhere.
A December 2025 report by Milliman for the Department of Insurance and Financial Services (DIFS) found average overall savings of $357 per vehicle from the reform, driven by a $369 average drop in PIP costs, with the largest savings in Wayne County at $539 per vehicle (DIFS). The report also found Michigan's uninsured motorist rate went from 5.4% higher than the national average before the reform to 3.9% higher after it.
Cost driver 1: personal injury protection
PIP pays medical bills, lost wages and related costs for you and your household after a crash, regardless of fault. Michigan is the only state that still offers unlimited lifetime PIP medical coverage. For policies issued or renewed after July 1, 2020, drivers choose among six levels, according to DIFS:
| PIP medical option | Who can choose it |
|---|---|
| Unlimited | Anyone; this is the default if you choose nothing |
| Up to $500,000 per person per accident | Anyone |
| Up to $250,000 | Anyone |
| Up to $250,000 with exclusions | Named insured with qualifying non-Medicare health coverage that covers auto injuries; household members with such coverage can be excluded |
| Up to $50,000 | Named insured enrolled in Medicaid, with household members covered elsewhere |
| Opt out | Named insured with Medicare Parts A and B, with household members covered elsewhere |
Insurers were required to cut average PIP medical premiums by at least 45% for the $50,000 option, 35% for $250,000, 20% for $500,000 and 10% for unlimited, for eight years from July 2020. The law also set a medical fee schedule and utilization review so providers cannot charge auto insurers more than set amounts. Details of the reform are in michigan's no-fault reform explained and our PIP guide, Personal injury protection (PIP) explained.
Cost driver 2: the MCCA fee
The Michigan Catastrophic Claims Association reimburses insurers for the most expensive PIP claims, funded by a per-vehicle assessment on every policy. Before the reform, drivers paid $220 per vehicle. According to the MCCA, starting July 2026 the fee is $84 for drivers who choose unlimited PIP and $19 for those who choose any other level, up from $82 and down from $23 the year before. The MCCA said the unlimited-PIP portion rose because long-term care costs, especially attendant and residential care, have grown faster than inflation, in part because of court decisions on the 2019 law. Its most recent annual report says it reimbursed $1.23 billion in claims in the prior year.
Cost driver 3: liability and lawsuits
Michigan's no-fault law limits lawsuits, but you can still be sued for serious injuries above the threshold and for vehicle damage. Since July 2020 the default bodily injury liability limit on a new policy is $250,000 per person and $500,000 per accident; you can choose lower limits, down to $50,000 and $100,000, using the selection form insurers must provide (DIFS). For vehicle damage the at-fault driver did not insure, the mini-tort lets you recover up to $3,000 for crashes after July 1, 2020 (MCL 500.3135).
Factors Michigan insurers may not use
Under MCL 500.2111, Michigan insurers may not set auto rates based on sex, marital status, home ownership, education, occupation, the postal zone where you live, or your credit score. They may still group risks by territory (see Why your ZIP code changes your car insurance price), and state law separately regulates credit-based "insurance scores," which cannot be used to deny, cancel or non-renew a policy; see credit-based insurance scores and car insurance. Since the reform, auto rates must also be approved by DIFS before use.
How to choose your Michigan coverage
- Check your health insurance first. Lower PIP options are only safe if your health plan covers auto accident injuries. According to DIFS, you may need a statement that your health plan does not exclude or limit auto injuries and has an individual deductible below $6,579.
- Consider what unlimited PIP protects. Catastrophic injuries can require decades of care. Weigh the savings from a lower option against that risk for every household member.
- Keep liability limits high. With lower PIP choices now common, injured people can sue for medical costs above another driver's PIP limit. The How much car insurance do I need? helps size limits.
- Look at the MCCA line on your bill; choosing below unlimited PIP removes the pure-premium part of the fee.
- Compare quotes for identical PIP and liability choices with the car insurance quote comparison worksheet, since insurers price the options differently.
Questions or complaints go to DIFS at 833-ASK-DIFS (833-275-3437).
Key takeaways
- Michigan's costs come from no-fault PIP, unlimited lifetime medical benefits and the MCCA catastrophic claims fee.
- The 2019 reform added PIP choices, a medical fee schedule, required PIP premium cuts and bans on non-driving rating factors.
- Michigan fell from second most expensive in 2019 to 12th in 2023 in NAIC data, and a state-commissioned study found average savings of $357 per vehicle.
- From July 2026 the MCCA fee is $84 per vehicle with unlimited PIP and $19 with other options.
- Lower PIP saves money only if your health coverage fills the gap; keep liability limits high either way.