best michigan insurance rates

Does anybody know what is going on with Michigan auto insurance rates?

Within the last two month, depending on the day of the week and who you asked, Michigan insurance rates are either going up $40, down $10, and up $36 on July 1, 2017, when Michigan Governor’s Rick Synders 2017 Budget is approved.

The confusion centers around nearly 100 auto insurers in Michigan who last year claimed a previously unavailable tax credit that is expected to cost the state $80 million in annual revenue.

According to the Detroit Free Press, an estimated 2 million Michigan’s insured drivers — are going to see a $40 per year increase on their auto insurance premiums if a tax credit that benefits the auto insurance industry is repealed.

News of the insurance credit surfaced in January 2016 during a state revenue estimating conference.

The drop in state revenue was a factor in the 2017 fiscal-year budget which Governor Rick Snyder presented in mid-February.

However, the Detroit News has reported a surplus should actually reduce the bill by $36 per year.

MCCA Executive Director Gloria Feeland said,

Motorists are getting a reduction because the fund’s stock market investments have been more profitable than expected and because more than $29 of the current assessment has helped reduce a predicted deficit.

Initially news of Governor Snyder’s plans to repeal the insurance tax was view with pessimism by the Michigan Chamber of Commerce.

Stop the Michigan car insurance tax - Michigan Insurance Rates

Michigan chamber Insurance Tax Repeal



Anderson Economic Group - Michigan Insurance Footprint Report - Michigan Insurance RatesThe Chamber also made reference to the Michigan Insurance Economic Footprint Report published in February by the research and consulting firm known as the Anderson Economic Group.

A copied  of the study can be found here.

According to the Michigan Insurance Coalition, since 2013, auto insurance companies have used this credit to reduce premiums to law abiding drivers.

“The tax credit allows the cost of uninsured motorists to be spread to everyone, not just to auto insurance consumers who are operating their vehicles lawfully and properly,” said Pete Kuhnmuench, Executive Director, Insurance Institute of Michigan.

Then, the Claims Journal recently announced,

The annual auto insurance fee that Michigan drivers pay toward caring for people catastrophically injured in crashes is rising to $160, a $10 increase. The assessment increased by $10.00 because assets set aside to pay existing claims produced returns less than anticipated.

The Michigan Catastrophic Claims Association announced Tuesday the new per-car assessment for the 12 months starting July 1.


This news has left blog author Steven Gursten asking one asking:

Are auto insurance companies having their cake and eating it too with MI Assigned Claims Plan assessments?

Michigan Auto Law

Insurance Journal also reported that, Michigan is the only state that requires drivers to buy unlimited medical benefits.

Regardless of what happens they are several things all Michigan drivers can do to save money on auto insurance.

Here are 4 easy ways to reduce your Michigan Insurance Rates

1. Buy insurance from a brokerage agency.

Franchised insurance agencies like State Farm, Allstate, and Nationwide and the others all have pluses and minuses, however, their biggest down flaw is that they only offer you one answer.

On the other hand, an insurance brokerage agency can offer you many options from various brands.

2. When you can, take advantage of multi- line discounts.

When you include a house, or other type of asset to your insurance policy you actually reduce the long-term risk the insurance company faces.

Thus, the Michigan insurance underwriter is willing to extend a deeper insurance rate discount.

3. If you are married, stay that way.

Studies show that married couples in Michigan save 23% more than single people.

4. Remove children over 20 from your policy.

Aside from the fact that it will teach your children to be responsible and independent…

… a child between the age of 20 – 35 will increase your Michigan insurance rates by 17% on average.

If you would like a free comparison quote from an independent insurance brokerage firm, contact Mahar Insurance today!