Michigan’s Auto Insurance Rates to Rise Again

America’s most expensive auto insurance premiums are about to go up again. Around two million Michigan drivers will end up paying another $40 a month on their insurance, The Lansing State Journal reported.

Rates will increase for customers of Michigan based insurance companies such as Auto Owners, AAA and Frankenmuth Insurance. Rates are going up because the State Legislature removed an $80 million tax credit from the 2016-2017 budget.

The credit finances a reimbursement fund which is an auto insurance mechanism unique to Michigan. The reimbursement fund pays companies back for damage caused by uninsured drivers.


The fund exists to solve a problem that the Legislature created in the first place. Michigan’s auto insurance rates are so high a large percentage of the state’s population drives without insurance.

Now it is about to make the problem worse again by raising rates yet again; an action that will encourage more people to drive without insurance. It would make sense to change the insurance system to lower rates so average could afford coverage.

The average driver in Michigan pays $2,551 a year for auto insurance, Value Penguin reported. The average US driver paid $907.38 a year for auto insurance, the same website noted.

Something is obviously very wrong with the auto insurance system in Michigan. One wonders how long it takes before the state’s voters demand real reform.