Insurance Companies Have Overcharged Michigan Drivers Since the Onset of the Pandemic— Here’s How to Recoup Your Costs

Despite the huge reduction in miles driven during the pandemic, car insurance companies in Michigan still charge some of the highest rates in the nation. We’re second only to hurricane-plagued Louisiana where insurance claims have spiked due to hundreds of thousands of cars recently destroyed by flooding. While many of us received small rebates on our car insurance premiums during the pandemic (as a result of the state insurance commissioner requiring insurance companies to address reductions in accidents and miles driven during COVID-19 lockdowns), Michigan drivers are still paying more than drivers just about anywhere in America. So, how can you fight back against those high rates? Here are some steps you can take right now.

Drive a Less Popular Car

It will probably come as no surprise that luxury cars, sports cars, and SUVs cost more to insure — in part because they cost more to repair after accidents. Additionally, highly popular vehicles are more likely to be stolen, resulting in costly insurance claims. Both in Michigan and nationwide, the Ford F-150 topped the list of vehicles most often targeted by “grand theft auto” aficionados.

The least expensive cars to insure are typically lower priced vehicles and, of course, those not frequently targeted by car thieves. In fact, the vehicle least costly to insure is the Chrysler Voyager minivan — not surprising since they’re often perceived as favorites of safe-driving suburban soccer moms! On the other end of the spectrum, winning the dubious honor of most costly vehicle to insure, was a high-performance Maserati sports car.

Shop Around for Insurance

You’ve no doubt seen ads featuring wisecracking Aussie lizards, various examples of motor vehicle mayhem, or humorous emus conveying witty messages about car insurance savings, among others.  News sources are reporting that dozens of new companies have begun to offer car insurance in Michigan since no-fault reform took place in 2020. This higher level of competition means you may be able to save hundreds of dollars (or more) each year simply by obtaining quotes from a few different insurers. Shopping around can be as simple as entering your information on one of several price comparison websites that provide quotes from multiple insurance companies, or you can call a local independent insurance agent and ask them to do the legwork for you.

Bundle Your Policies Together

If you want to save more money, there could also be something to be said for putting all your insurance eggs in one basket. The financial experts at nerdwallet.com report that sourcing your home and auto insurance from a single insurance company can save you up to 25% on combined premiums. The best way to find a cost-saving bundle might be using a comparison service like TheZebra.com (which assesses rates from more than 100 insurance companies) to identify a bundle fitting your needs, which can combine house and auto policies (or match your renters’ insurance policy with car insurance from a single provider). In addition to reviewing The Zebra, Car and Driver magazine notes that additional services such as Insurify also offer multiple sources for affordable insurance quotes.

Move to a Different Neighborhood … or State

It’s a fact that insurance costs can vary widely based upon where you live. For instance, Detroiters often pay far more for car insurance than suburban drivers just a few miles away. People living in remote, rural areas can pay even lower rates, since it’s less likely they’ll become involved in accidents or be victims of auto theft in uncongested areas. If you go on an extended vacation and put your car in storage, you may be able to save some money on car insurance. Likewise, if you have a college student living away from home, you could possibly get a discount, since they won’t be driving the family car for extended periods of time.

Are you a snowbird (someone who lives part of the year in Michigan and the remainder in warmer climates)? Depending on the length of your stay in each region, you may find it less expensive if you change your legal residence to another state. For example, once you’ve lived in Florida for six months, you’re considered a legal resident and can obtain your car insurance there (likely for far less than you’d pay as a Michigander). Changing your legal residency status can also have tax-saving implications.

Adjust Your Collision and Comprehensive Deductibles

Moving away from Michigan might seem drastic — thankfully, there are other ways to cut your car insurance costs without leaving our pleasant peninsulas. Raising your car insurance collision and comprehensive deductibles (the amounts you must pay before your coverage kicks in) can result in significant savings. Some people call this “self-insurance” because you’re accepting more financial risk should you ever become involved in an accident. For example, if you raise your collision deductible from $500 to $1,000, you might save $100 on your insurance premiums. Essentially, the higher a deductible you’re willing to accept, the lower the insurance will cost. Put the money you save in the bank and, after a few years, you will have more than made up for the added financial risk of a higher deductible.

Boost Your Credit Score

While Michigan does not permit auto insurance companies to use credit scores when setting rates, many states do allow insurers to charge higher rates to drivers with poor credit ratings. That’s because they’ve found that low credit scores directly correlate to a greater propensity to filing insurance claims.  While this doesn’t directly affect Michigan drivers (at least when it comes to credit scores right now)  you’ll want to check your credit report to ensure you’re not overpaying for insurance protection if you ever move out of state. Although “credit scores” are ostensibly off limits here, Forbes reports that Michigan law does allow insurance companies to rate customers using “insurance scores” to predict risk, and review other credit information (i.e. bankruptcy status, debt load, etc.) when determining a customer’s insurability.

Overhaul Your Insurance Coverage

Finally, closely examine your entire car insurance policy. There may be coverages you can do without, which could make a dent in your premiums. For instance, if you’re already a member of AAA, do you really need to pay extra for roadside assistance on your car insurance policy? Or if you’re driving a car worth a few thousand dollars (and likely to be totaled in even a minor crash) is it worth carrying collision coverage? Or maybe you’re paying for a rental car benefit in the event you get in an accident that puts your car out of commission. If you have a spare vehicle in the household, perhaps you could drop that superfluous coverage.

Taking a close look at the details of your policy can add up to significant savings — so can noting and reporting your driving habits. If you are working at home now instead of commuting, you can let your insurance company know of this change in your driving habits, and potentially receive a rate reduction. And if you don’t have a daily commute, you might find that “pay-per-mile” insurance policies can save you money. These plans charge you based on how much you drive, which could bring cost savings to folks who use their cars less. The credit reporting website WalletHub (among other insurance price comparison sites) can help you find a pay-per-mile policy that’s right for you.

We’re Watching for Other Ways to Protect You and Your Wallet

At Mike Morse Injury Law Firm, we’re always looking out for the best interests of our clients and fellow Michiganders. We hope this article will help you save some money on your car insurance coverage and we want you to know that if you ever need us for any reason — say you’ve been injured in a car accident or get bitten by a neighbor’s unruly dog, — we’ll be there for you. Simply give us a call at 855-MIKE-WINS (855-645-3946) or contact us here.

Content checked by Mike Morse, personal injury attorney with Mike Morse Injury Law Firm. Mike Morse is the founder of Mike Morse Law Firm, the largest personal injury law firm in Michigan. Since being founded in 1995, Mike Morse Law Firm has grown to over 200 employees, served 40,000 clients, and collected more than $1.5 billion for victims of auto, truck and motorcycle accidents. The main office is in Southfield, MI but you can also find us in Detroit, Sterling Heights and many other locations.