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When you live in Michigan, you have no choice but to purchase no fault automobile insurance on every vehicle that you have registered in the state.
Michigan may have a unique no fault insurance law that provides you with unlimited medical and rehabilitation expenses, but these unlimited benefits come at a cost.
Buying insurance may be a must, but you as a consumer have a choice when it comes to which insurer you want to buy your coverage from. With so many different companies that are licensed to offer coverage to residents in Michigan, it is time to learn how to find a policy that you can afford from a company that you can trust.
If you want to make the best purchase, you need to remember that not all policies are created equal.
There are companies that offer extremely broad coverage options and there are others dedicated to offering the best possible service. Each company has something that makes them unique, and you need to decide what you value the most.
Price is important, but so are other factors that you might overlook when you are too focused on price. This is your guide to learning how to find a company that will offer these broad coverages, great service, and also the best rates.
Use the FREE car insurance quote comparison tool above to start your search!
How to Choose the Right Michigan Insurer
If you were to look at the long list of insurers that are licensed to do business in the state of Michigan you might be overwhelmed at what you discover.
There is a myriad of carriers that offer products to drivers in the state, but some of these companies are not as reputable as their competitors.
Some well-known and established companies hold a great deal of market share and are leaders in the industry. Other companies may be a little less recognizable in terms of their branding but still a good choice.
The last group are the insurers with little experience, a poor reputation and a weak financial standing.
It is up to you to do research to find out which insurers make the cut and which need to be avoided at all cost. Here are some factors that are important:
Financial Strength and How it Relates to Affordability
A company can only be financially healthy if it collects adequate premiums from its policyholders. It can be much more difficult for companies in Michigan to set their rates than it is for other carriers doing business in other states because of the unlimited medical expense benefit.
This is why it is extremely important for carriers licensed in the Great Lake State research their rates and charge adequate premiums to cover the risk they present.
Insurance is all about risk, and insurers will consider all of the most popular risk factors when they are assessing applications and setting rates.
If a risky applicant with driving habits that makes them more likely to file a claim is charged very low premiums, the insurer will have to recoup for this shortage of premiums elsewhere to cover the claims that are filed by others. By setting rates that are too low, the carrier will affect their financial health in the end.
You can find out if an insurance company is charging their policyholders enough by reviewing financial strength rankings that are assigned by unbiased third-party agencies. These grades show if a company is stable, creditworthy, and financially strong enough to pay claims.
One very reliable agency that reviews the financial statements of all financial companies is A.M. Best.
Is it important to you that you can buy more than one line of insurance with a company? Would you like to do business with a company that has supplemental policy features that benefit you?
Do you want a full-service claims experience where you can drop your car off for repairs and pick up your rental all at once? These are all things to consider. Some insurers offer very narrow coverage options or lines of insurance.
Others believe that it is the little features that keep customers loyal and will offer special discounts. Be sure to consider the product offerings and what makes the company unique.
Customer and Claims Service
Unless you file a claim, you are paying solely for customer service when you buy a Michigan car insurance policy. If you want to get the best service possible, you need to find a company that excels at treating you the way you deserve to be treated.
Sometimes you have to learn from experience, but that is not always the case. With the Internet and all of the tools that you can use on the world wide web, it has never been easier to be an informed consumer.
One very valuable tool that can help you determine if an insurer is dedicated to service is the Consumer Information Source. This source that can be found on the National Association of Insurance Commissioners’ website will give you complaint information, licensing information and financial information all on one platform.
Simply enter the company, select the business type, and then locate the Michigan location for state specific information.
Coverage Requirements in Michigan
Michigan is a mandatory no-fault state where you are required to buy three different types of coverage. The requirements include Personal Injury Protection (PIP), Property Protection Insurance (PPI), and Residual Liability Insurance (BI/PD). Here is how the requirements are broken down:
PIP: Pays for unlimited medical expenses and rehabilitation costs as long as the expenses are reasonable.
PPI: Pays for up to $1 million of property damage as long as the damage occurs in Michigan.
BI/PD: Pays for up to $20,000 for one person and $40,000 for each accident if someone is seriously hurt or killed, and up to $10,000 to repair property damages outside of Michigan when you are at-fault. You can raise these limits for more protection when you are out-of-state.
How to Save Money on Insurance in Michigan
In a state where the auto insurance requirement are so specific, it is difficult to imagine that it is possible to save money on premiums.
For those who are moving to Michigan from another state, the idea of having unlimited coverage for medical expenses might sound a bit expensive.
Your assumptions are not entirely incorrect as reports from Insure.com show that, assuming all of the rating factors are the same, the rates in Michigan are the second highest in the nation.
This is because of the state requirements and also because there is a charge of $175 per vehicle that goes to the Michigan Catastrophic Claims Association that helps insurers pay for claims that exceed $500,000.
While the rates are near the top in the nation, second to Louisiana, there are ways to keep your rates low if you take the time to compare quotes and find discounts.
Instead of opting for the minimum residual liability limits and electing not to carry physical damage coverage, you can purchase a very comprehensive plan that will help you pay for your repair bills and rental bills when you have a loss. Here are tips on saving money without choosing to carry only state-mandated cover:
Buy a Car After You Consider Insurance Costs
A vehicle’s features, crashworthiness, body style, and safety record all play a role in how much insurance premiums cost. This is why you should avoid the temptation to buy that sports car you want so badly and shop prices first.
You can save hundreds of dollars by comparing costs of insurance for each vehicle first.
Multi-car and Multi-policy
If you have more than one car, or you are married and your spouse has their own insurance, combining your insurance will benefit you. Multi-car discounts and extra car classifications can save you as much as 30 percent.
It can also help if you find a carrier that has property insurance, life, or health.
This will help you earn a discount on each policy, which truly helps when the savings add up.
Take Traffic School or Safety Training
If you get a ticket, it is not the end of the world. A ticket will affect your rates if it shows on your record, but it does not have to show if you take traffic school. Always take traffic school when you are eligible so that you are not surcharged for one ticket for 3 years. If you have a clean record, it can still help you to take safety training to receive a discount if you are under 25 or over 55.
The best way find cheap car insurance is to comparison shop. With so many insurers that set their own rates, the only way to really know you are paying a fair price is to price shop.
Use an online rate comparison tool, such as the FREE one below, to compare multiple rates instantly, and you will find cheap insurance in Michigan without compromising quality.