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Trade car insurance under 25

Getting the minimum amount of car insurance is risky business. However, not everyone can afford a bunch of additional coverage. And, some people might not need anything but the minimum. In those cases, having state-mandated coverage is far better (read: legal) than having no insurance at all.

But how do you find the cheapest rate? I examined over 250 quotes from 28 different companies and found three auto insurers that offer the most affordable policies anywhere in the country. Keep in mind, though, everyone’s individual rates will vary.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Best Cheap Car Insurance Companies

  1. GEICO
  2. State Farm
  3. Progressive

How I Chose the Best Cheap Car Insurance Companies

First, I found the top five to seven insurance providers in each state by selecting companies with above-average customer satisfaction ratings from J.D. Power and high financial strength marks from A.M. Best. Why? Because cheap auto insurance policies are great, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.

Then, with some help from the team at The Simple Dollar, we applied for over 250 quotes both online and over the phone from my pool of auto insurance companies from all 50 states. Each member of the team used personal information during the quote process to ensure that we could see who was consistently cheapest across the country with a handful of scenarios. What did remain the same, however, was the amount coverage we applied for: each state’s minimum coverage. No frills, no extras; just the absolute minimum coverage to legally drive on the road.

Next, I tallied and compared how many times each company had the first, second, or third cheapest yearly premium. I awarded five points for first place, three points for second place, and one point for third place.

As it turns out, the cheap car insurance market is dominated by three main providers: GEICO, State Farm, and Progressive. (The other 25 insurers didn’t even score high enough to register in my test.) And, as you can see below, GEICO was the overwhelming victor.

Insurer # of 1st Place Awards # of 2nd Place Awards # of 3rd Place Awards Total Score
GEICO 19 16 2 145
State Farm 12 14 12 114
Progressive 7 5 3 53

GEICO

GEICO was the cheapest option in 19 of the 50 states. It was also one of the three most affordable options 75 percent of the time, and its best offer was often hundreds of dollars cheaper than the next-best competitor. Take these annual quotes for New York, Pennsylvania, and Washington for example.

New York Pennsylvania Washington
GEICO: $329 GEICO: $225 GEICO: $623
Allstate: $538 State Farm: $394 Allstate: $898

*Note: Occasionally, the reason GEICO was able to beat its competition by such a large margin was because the other insurers required slightly more coverage than the state mandated.

The gecko-loving company is without a doubt the most consistently affordable option out there, so it deserves a shopper’s consideration. And, it’s true, according to my research, it is safe to say that 15 minutes could often save you “15 percent or more” on a state-minimum policy. However, its range of coverages and discounts don’t particularly shine when compared to a competitor like Allstate. Allstate customers enjoy prepay discounts, low-mileage discounts, interior vehicle coverage, and new car replacement — all of which are not offered at GEICO.

When it comes to customer service ratings, GEICO doesn’t have anything to write home about. (It fell just under the industry average according to JD Power.) But, if you’re dead-set on purchasing the least amount of insurance that you possibly need, then GEICO is your best bet.

State Farm

State Farm had a lower overall score than GEICO, but wound up in the top three a total of 38 times (GEICO only placed 37 times). When State Farm placed, it usually fell between $30 to $50 dollars of the competition. Though, it occasionally would surprise me with a GEICO-like rate. The two best examples of this are Minnesota and South Carolina. In Minnesota, State Farm was $120 cheaper than American Family, and in South Carolina it beat GEICO by a whopping $223.

Quotes aside, State Farm is the nation’s largest auto insurer. It ranks consistently well for customer satisfaction and rates above average in most of the regions of the J.D. Power survey. It also earns A.M. Best’s top marks (A++) for financial strength. All that’s to say it is a great choice if you can spare a few extra dollars each month. Plus, it has the best tools of any auto insurance provider out there, including mobile bill pay, mobile claim filing, and a pay-by-bank account option.

Progressive

Progressive only placed 1st in seven states, and when it did, it was usually less than $20 ahead of the runner-up (which was usually GEICO). That doesn’t mean Progressive is never a viable option, though. Consider the state of Montana, where Progressive came in $22 cheaper for the year. So for less than $2 more each month, a Montana driver could take advantage of mobile claims filing, loyalty discounts, prepay discounts, and low-mileage discounts that GEICO doesn’t offer.

Where to Find Car Insurance Discounts

Once you’ve seen some quotes, you need to master discounts — the key to cheap car insurance rates. Many insurers have a wide variety of overlooked deductions that go beyond bundling or insuring multiple vehicles, and some of them are less obvious than you may think.

Driving Schools

Driving education is a discount opportunity many don’t know exist. Drivers who pass an accredited driver’s ed class or defensive driving training are eligible for a sizeable price reduction. The amount of this discount isn’t standardized across the nation or with insurers, but according to DriversEd.com, some drivers might welcome as much as a 10% decrease in their bill. Plus, if you’ve recently received a ticket, enrolling in a defensive driving course can prevent the premium hike on your insurance (most companies only let you do this once every 12 months).

Defensive driving courses cover topics such as traffic laws, drug- and alcohol-impaired driving, and inclement-weather driving and are often available online or at commercial driving schools. Courses for defensive driving can be found through your local DMV or community center. Most run about six hours long and cost anywhere from $50 to $300 a person.

After completing a defensive driving course, participants will receive a certificate that can be presented to insurance companies to qualify for a discount. Depending on the insurance company, drivers may also have to retake the course and be current on their certification in order to continue receiving the discount.

If you aren’t the only person covered on your auto policy, consider getting all the drivers on your policy — especially teens, as they are expensive to insure — to take a defensive driving course and you will be eligible for additional discounts.

Good Student Discounts

These discounts are typically given to drivers under the age of 25 who are enrolled full time at a high school or college or university and are maintaining at least a 3.0 grade point average (or are on the honor roll or dean’s list).

What about the savings? According to CarInsurance.com, the discount can range anywhere from 5% to 10%, making it one of the most profitable and achievable discounts of all. Consider Travelers, which offers good students up to 8% off.

In order to prove satisfactory academic achievement and receive the discount, students need a current transcript or a letter signed by a school administrator. Students who are homeschooled can present standardized test results, such as their SAT or ACT scores, that are within a desired percentile range in order to qualify. Good grades can continue saving you money after graduation as some insurance companies extend this discount to post-grads for a limited time.

If you’re a student, or the parent of a student, you can learn even more at The Simple Dollar’s student guide to car insurance.

Safe-Driver Discounts

Drivers with a clean driving record — a standard that is determined by each individual insurance provider — are eligible for hefty discounts. Having a squeaky clean record not only gives you a discount opportunity; it can also save you a lot more money in the short term.

There is no universal definition of safe driving, though. Insurance companies generally mean avoiding collisions and accidents for which you can be found at fault, and moving violations such as speeding, driving under the influence, or reckless driving.

Resident student discounts

These discounts can be offered to students attending college more than 100 miles away from home. They are intended to be used exclusively by those students who are not planning to drive the insured vehicle while at school but may use it while they are home for vacations.

Other Discounts to Consider

  • Active-duty military and veterans discounts
  • Car alarm systems or other safety equipment discounts
  • Paid-in-full or prepay discounts
  • Occupation and member discounts
  • Low mileage discounts

One of the most important things you can do while shopping is to ask the insurance company for a complete list of discounts because not all may be advertised.

Major Car Insurance Types

Though companies offer several more nuanced options and add-ons, the three major types of auto insurance boil down to:

  • Liability coverage
  • Collision coverage
  • Comprehensive coverage

Liability Coverage

Liability coverage, required by law in most states, covers the other driver’s personal injury and property damage in a crash where you’re found to be at fault. It does not cover your own injuries or property damage. Buying only liability insurance is always going to be your cheapest option, though not necessarily the wisest. (Sometimes it makes sense to carry only liability coverage, and sometimes it doesn’t.)

You’ll probably see your liability coverage written like this on your quote or car insurance policy: $50,000/$100,000/$50,000 (or 50/100/50). That means you have $50,000 in bodily injury coverage for each person, $100,000 in bodily injury coverage total, and $50,000 in coverage for property damage. Each state requires its own minimum amount of liability insurance.

Buying the bare minimum is tempting since it will keep your rates as low as possible. Unfortunately, that’s a bad idea — a bad crash can mean your costs will easily surpass low state minimums, and then you’ll have to pay up. In North Carolina for example, its minimum for bodily injury is $30,000, but the average cost of a non-fatal disabling auto-wreck injury is over $60,000. If you only have the state’s minimum coverage, you could wind up paying over $30,000 out of pocket. And if you don’t have that kind of money laying around, your other assets become vulnerable.

Collision coverage

Collision coverage covers the damage to your car sustained in a crash. This most commonly covers accidents when you’re found to be at fault, but it may also pay in certain circumstances when another driver is at fault, or in scenarios not covered under your other policies.

The cost of your collision coverage will largely depend on your car’s value, but you do control the deductible — the amount you pay out of pocket before your insurance company picks up the rest of the tab.

Comprehensive coverage

True to its name, comprehensive car insurance covers almost any car-related calamity you can think of minus damage resulting from a crash. Instead, comprehensive policies pay for things like auto theft, damage from severe weather, or needed repairs after a late-night rendezvous with a disoriented deer.

Comprehensive coverage is meant to complement collision coverage, not replace it. Like collision coverage, the cost will depend on your car, but you control your deductible.

What types of car insurance do I really need?

Comprehensive and collision coverage seem like a smart choice, but they come with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. Dropping this coverage usually isn’t a good idea for anyone without the savings to pay for repairs out of pocket.

But, there are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that you can easily fix or replace, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on any car you drive sparingly.

To see how much I would save on auto insurance by nixing all coverage but liability, I plugged a few stats into a quote generator. I used the persona of a married male in his early 30s driving a paid-off 2011 Hyundai Sonata. I said he lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year. A policy with 50/100/50 in liability, as well as comprehensive and collision policies with $250 deductibles, would set him back $45 a month. Dropping the comprehensive and collision policies would bring my bill down to just $24 a month — almost half the the cost.

Would I personally drop my comprehensive and collision policies? No, because my 2013 Jeep Patriot is still relatively new and would cost a significant sum to repair or replace. My brother, however, drives a 1984 Ford F150. At best, it’s worth around $3,000 — and his policy is only $19 a month! For him, dropping comprehensive and collision coverage made a lot more sense.

The bottom line: Liability coverage is your cheapest option and meets the legal requirement, but dropping collision and comprehensive coverage might be a risky move if it would be a major financial hardship to fix or replace your car after an accident.

Add-Ons and Other Types of Coverages

There are a number of other coverage types and add-ons, some of which may be required in certain states. Of particular note is personal injury protection, which pays your medical expenses after a crash.

If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies.

There are also uninsured and underinsured motorist coverages, which get you off the hook after a crash where the other driver is at fault but doesn’t carry enough (or any) insurance and can’t afford to pay. Other add-ons pay for rental cars while your car is being fixed and for roadside assistance.

As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam), rental-car riders are unnecessary, and a AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.

What car insurance is required in my state?

Each state has different requirements when it comes to car insurance. Many simply require liability insurance (both bodily injury and property damage). Others go a step or two further, requiring add-ons such as personal injury protection and uninsured or underinsured motorist coverage. Visit the table below and locate your state to find your state’s requirements.

According to the Insurance Information Institute, here are the kinds of insurance each state requires as of September 2015, as well as the minimum required amounts of liability insurance. The only state that does not require liability insurance is New Hampshire; however, that state still mandates that you show you have sufficient funds to meet state requirements if you’re at fault in a crash.

Types of insurance required Minimum required liability insurance
Alabama Bodily injury liability, property damage liability 25/50/25
Alaska Bodily injury liability, property damage liability 50/100/25
Arizona Bodily injury liability, property damage liability 15/30/10
Arkansas Bodily injury liability, property damage liability, personal injury protection 25/50/25
California Bodily injury liability, property damage liability 15/30/5
Colorado Bodily injury liability, property damage liability 25/50/15
Connecticut Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 20/40/10
Delaware Bodily injury liability, property damage liability, personal injury protection 15/30/10
District of Columbia Bodily injury liability, property damage liability, personal injury protection, uninsured motorist 25/50/10
Florida Property damage liability, personal injury protection 10/20/10
Georgia Bodily injury liability, property damage liability 25/50/25
Hawaii Bodily injury liability, property damage liability, personal injury protection 20/40/10
Idaho Bodily injury liability, property damage liability 25/50/15
Illinois Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20
Indiana Bodily injury liability, property damage liability 25/50/10
Iowa Bodily injury liability, property damage liability 20/40/15
Kansas Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/10
Kentucky Bodily injury liability, property damage liability, personal injury protection 25/50/10
Louisiana Bodily injury liability, property damage liability 15/30/25
Maine Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, medical payments 50/100/25
Maryland Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/15
Massachusetts Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 20/40/5
Michigan Bodily injury liability, property damage liability, personal injury protection 20/40/10
Minnesota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/10
Mississippi Bodily injury liability, property damage liability 25/50/25
Missouri Bodily injury liability, property damage liability, uninsured motorist 25/50/10
Montana Bodily injury liability, property damage liability 25/50/10
Nebraska Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25
Nevada Bodily injury liability, property damage liability 15/30/10
New Hampshire Uninsured motorist, underinsured motorist, medical payments 25/50/25 (minimum available in NH, but not required by state law if you show sufficient funds)
New Jersey Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 15/30/5
New Mexico Bodily injury liability, property damage liability 25/50/10
New York Bodily injury liability, property damage liability, personal injury protection, uninsured motorist,wrongful death 25/50/10
North Carolina Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 30/60/25
North Dakota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25
Ohio Bodily injury liability, property damage liability 25/50/25
Oklahoma Bodily injury liability, property damage liability 25/50/25
Oregon Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25
Pennsylvania Bodily injury liability, property damage liability, personal injury protection 15/30/5
Rhode Island Bodily injury liability, property damage liability 25/50/25
South Carolina Bodily injury liability, property damage liability, uninsured motorist 25/50/25
South Dakota Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25
Tennessee Bodily injury liability, property damage liability 25/50/15
Texas Bodily injury liability, property damage liability 30/60/25
Utah Bodily injury liability, property damage liability, personal injury protection 25/65/15
Vermont Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/10
Virginia Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20
Washington Bodily injury liability, property damage liability 25/50/10
West Virginia Bodily injury liability, property damage liability, uninsured motorist 25/40/10
Wisconsin Bodily injury liability, property damage liability, uninsured motorist 25/50/10
Wyoming Bodily injury liability, property damage liability 25/50/20

Six Tips to Find Cheap Auto Insurance

Certain factors that affect your car insurance rates are largely beyond your control. These include basic demographics such as your age, gender, marital status, location, and job.
But other factors, including what and how you drive, are easier to change. So, comparison shop, exploit discounts, and consider bundling policies to find the cheapest car insurance companies, too.

Shop Around
It’s a no-brainer, but it always pays to shop around for cheaper car insurance. Instead of wasting time making endless phone calls or filling out the same information on dozens of websites, save time by using an online quote tool. Online quote tools help you get a quick snapshot of potential rates from several auto-insurance companies at once.

More importantly, getting multiple auto insurance quotes helps you avoid becoming a victim to something called price optimization. Price optimization is the devious practice of of establishing rates based upon how much insurance companies think customers are comfortable paying.

Earnix, a pricing analytics platform, found that 45% of larger insurance companies use this tactic to maximize their profits. These insurers mine and analyze a ton of personal data, like credit scores and web shopping habits, to determine how likely you are to leave them for another auto insurance company. The bottom line is this: Auto insurance companies are going to charge you based upon how much money they believe they can comfortably squeeze from your pocket, not who you are as a driver.

Getting new quotes on the regular is the best way to avoid price optimization because, just like other personal data, insurers can see how often you shop around. The more you do it, the less likely they are to risk upping your premium and lose you as a customer.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Bundle Policies
Many car insurance companies will give you a discount if you have other policies with them. For instance, you may get a break on car insurance if you use the same provider for life, home, or renter’s policies. Bundled policies are convenient, too; you’ll be dealing with only one bill and one company.

A note of caution: Don’t automatically assume bundles will save you money. Companies that offer only auto insurance may offer compelling discounts to keep your business. Sometimes that means you get cheaper car insurance if you keep policies with separate insurers.

Boost Your Deductible
Your deductible is what you pay out of pocket before your insurance covers the rest of the cost to fix or replace your car. A plan with a $250 deductible will generally cost more than one with a $1,000 deductible.

For a real-world example, I plugged my mock persona into a quote generator from Progressive, changing only the deductible to see how it would affect my rate. As mentioned earlier, I used a married male in his early 30s driving a 2011 Hyundai Sonata. He lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year.

With a $100 deductible on comprehensive and collision coverage, he would pay roughly $120 a month. Raising that deductible to $250 brought the bill down to about $100 a month. A $500 deductible reduced the monthly bill to $90, and a $1,000 deductible pushed it all the way down to $82. That means he could save $456 a year by choosing the $1,000 deductible instead of the $100 deductible — not a bad sum.

However, raising your deductible is only a good move if you have cash stashed away to pay the higher deductible in case of a crash or other calamity. Also keep in mind that factors such as your age and driving record will affect how much raising your deductible will actually save you.

Drive a Low-Risk Car
Luxury cars are always the most expensive to insure. These cars have the power to go extremely fast, and insurance companies know their drivers are more likely to get into trouble. These cars also cost a lot more to fix and are attractive targets for thieves — all situations your insurance company wants to avoid.

The most expensive 2015 car to insure, the 600-horsepower Nissan GT-R Nismo, will set you back about $3,574 a year in car insurance, according to Insure.com. Right behind it are a slew of high-powered or luxury rides including the Mercedes-Benz SL65 AMG Convertible, Dodge SRT Viper, Porsche 911 Carrera S Cabriolet, and Audi R8 5.2 Spyder Quattro, all of which still top $3,000 a year.

If you don’t have six figures to drop on a car, here’s some good news: Family-friendly vehicles including minivans, sedans, and smaller SUVs cost the least to insure. Their drivers tend to be more careful, ultimately filing fewer claims. These vehicles are simpler to fix and they aren’t quite as tempting for thieves.

The cheapest car to insure, the Jeep Wrangler Sport, will set you back only about $1,134 a year in premiums. The Jeep Patriot Sport, Honda CR-V LX, Dodge Journey SXT, and Honda Odyssey EX-L are similarly easy on the wallet.

Ultimately, the choice is yours, but a less-glamorous ride can help you nab cheap auto insurance.

Change Your Driving Habits
Insurance is all about risk. If you get a speeding ticket every month, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Unfortunately, cleaning up a spotty driving record can take time.

Driving less is the simplest, easiest way to change your driving habits. Consider your options carefully: Can you carpool? Work from home? Use mass transit or even move closer to your job? All of these options can help you save since less time behind the wheel means less chance of a claim. Be sure to tell your insurer about your new habits.

Maintain Good Credit
It may seem unfair, but the vast majority of car insurance companies look at your credit score to help determine your rate. If you have good credit, your insurer assumes you’ll be more responsible behind the wheel. Bad credit means you’re statistically more likely to file a claim, insurers say.

According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay double, triple, or even quadruple over someone with a perfect credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland, and Massachusetts. If you don’t live in those states, you’ll want to work on your credit score in your quest for cheap auto insurance.

It’s Time to Save on Car Insurance

A little legwork now can save you big in the long run, so remember to re-evaluate your car insurance at least annually. Your own changing circumstances and old-fashioned competition between insurers always has the potential to hook you a cheap car insurance policy.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Source


Michigan is known for having the most comprehensive no-fault insurance system in the country – and some of the highest car insurance rates as well. The ZIP code 48227 in Detroit has the highest average annual rate in the U.S., at $5,109. Even a driver with a great record will pay thousands of dollars a year in many Detroit-area suburbs. Rates fall substantially in Michigan’s more rural areas.

While you don’t have a choice about whether to buy car insurance in Michigan, you do have options on how much you pay for it. We’ll show you how to be sure you are finding the cheapest car insurance in Michigan and provide average car insurance rates for your area so you can compare costs. We also explain Michigan car insurance laws.

The average car insurance rate in Michigan is $2,226 a year. The severity and frequency of claims in your neighborhood, your driving record, the type of car you drive, your credit and other variables are used by insurance companies to figure out the cost of your policy. That’s why the price for the same coverage can vary by hundreds, sometimes thousands, of dollars among insurance companies. For example, in Detroit ZIP code 48227 the highest rate among six carriers is ($6,841) is twice as much as the lowest ($3,601). That means you could overpay by $3,240 if you don’t shop around. Enter your ZIP code to see the average car insurance rate for your neighborhood. You will also see the highest and lowest rates from the six major carriers surveyed to get an idea of what the most affordable car insurance price is in your area.

Cheap car insurance in Michigan

Michigan car insurance requirements

State law requires the following coverages:
Minimum bodily injury liability $20,000/$40,000
Minimum property damage liability $10,000
Property protection insurance (PPI) $1 million
Personal injury protection (PIP) Medical and work loss

Michigan car insurance laws mandate that drivers carry minimum liability coverage limits of 20/40/10 on their vehicle.

Michigan car insurance laws also mandate that you have Property protection insurance (PPI). It is a mandatory coverage specific to Michigan. It provides up to $1 million in protection from damage to buildings, fences, poles, other inanimate objects and legally parked cars. Claims under PPI only apply to unintentional damage to other people's property, so if you run into your own fence, you'll pay out of pocket to fix it.

Personal injury protection (PIP) is also required. It is used to pay for medical expenses regardless of who is at fault. Michigan's no-fault system provides you and your family with unlimited lifetime coverage for medical expenses resulting from an auto accident, regardless of fault. And, it’s true that In Michigan, your bodily liability insurance will typically not be triggered for claims due to the pay outs that come under the no-fault PIP portion of your policy. But it’s still wise to consider buying extra car insurance coverage.

Here’s why: Under the few exceptions when your bodily injury coverage does come into play, you will only be covered up to your policy limits. If you have minimum bodily injury limits and are sued, you are responsible for paying the difference. For instance, if you kill another driver in an accident, and the family sues you for $100,000 for pain and suffering, your insurer will only pay out $20,000, leaving you to pay the remaining $80,000.

The good news is that full coverage usually isn’t that much more expensive than minimum coverage. You do pay more if you choose to get higher liability limits, comprehensive and collision coverage, but typically the extra protection is worth the relatively small increase you pay for the best car insurance in Michigan.

Increasing your insurance from the state minimum to full coverage with a $1,000 deductible costs, on average, $762 more, or $64 a month. Boosting liability limits without getting optional coverages may even lower your rate, as you’ll see in the chart below. That’s because insurers in Michigan typically consider drivers carrying higher limits to be less accident-prone.

Coverage limits Average annual rate
Liability Only – state minimum $2,446
Liability Only - 50/100/50 BI/PD $2,145
Full Coverage - 100/300/100 BI/PD
$1,000 Comp/Collision deductible
$3,208
Full Coverage - 100/300/100 BI/PD
$500 Comp/Collision deductible
$3,535
Full Coverage - 100/300/100 BI/PD
$250 Comp/Collision deductible
$3,819

*The table shows the average annual rate of 10 ZIP codes in the state from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for CarInsurance.com by Quadrant Information Services.

Recommended car insurance coverage

If you have few assets or you have an old car, you may want to buy cheap Michigan auto insurance. But keep in mind that even a minor accident will typically cost more than what your insurance policy will pay out if you carry just the coverage required to drive legally in your state.

Use our How Much Car Insurance Do You Need? tool to get a recommendation.

AGE STATE VEHICLE MODEL YEAR PRIMARY RESIDENCE OWN RENT VEHICLE FINANCING OWNED FINANCED LEASED

Liability

If your net worth is:

  • less than $50,000, choose at least 50/100/50
  • between $50,000 and $100,000, choose at least 100/300/100
  • more than $100,000, choose at least 250/500/100

If you're leasing or financing your car, you must get coverage of 100/300/100 or higher.

Collision and comprehensive

It's important to carry collision coverage on your vehicle if it's newer or not easily replaced. This is because Michigan's no-fault PPI insurance only pays for damages to properly parked vehicles. Also, the mini-tort law only allows you to sue an at-fault driver for up to $1,000 for other types of damage.

Collision pays for damage to your car from an accident. The average yearly cost for collision coverage in Michigan is $369, according to the Insurance Information Institute, an industry trade group.

There are three basic kinds of collision insurance to choose from in Michigan:

  • Broad Form collision -- pays for damages regardless of fault, with a deductible that applies only if you are substantially at fault
  • Standard collision -- pays for damages regardless of fault, with a deductible that always applies.
  • Limited collision -- pays only if you are not substantially at fault, and may or may not have a deductible.

Comprehensive insurance pays to replace stolen cars and for damages to your car from fire, flooding, hail, animal strikes, falling objects and vandalism. The average annual cost for comprehensive coverage in Michigan is $143, according to the III. If your car is:

  • less than 10 years old, you should strongly consider buying collision and comprehensive.
  • more than 10 years old, only buy collision and comprehensive if your car is worth $3,000 or more, if you couldn’t afford to replace your car if it’s wrecked, or if you just want more protection on your policy.

If you buy comp and collision, check our guide to choosing a deductible amount.

Uninsured/underinsured motorist

These coverages are optional in Michigan and should match the liability limits you choose. Uninsured motorist coverage and underinsured motorist coverage pays for damages if you’re hit by a driver with no insurance or a driver with coverage that’s insufficient to pay for your repairs and medical expenses.

Medical coverage (MedPay)

Medical payments coverage can help pay for the medical or funeral expenses of covered drivers and passengers after an accident, regardless of fault, up to $25,000. MedPay is optional in Michigan, and because you’re required to carry PIP, MedPay isn’t a must-have. The benefits of adding MedPay are that it covers passengers who don’t have health insurance and there is no deductible

MedPay does the following:

  • Covers you and your passengers’ medical expenses
  • Pays for expenses after health insurance limits are exceeded
  • Offers additional protection to insured drivers who are hit by a car while walking or biking

Gap insurance

If you don’t own your car outright and have an accident, gap insurance pays the difference between the cash value of your car and the current outstanding balance on your loan or lease.

  • If you’re financing your car, your car is less than one year old and you’ve put less than 20 percent down on it, you should buy gap insurance. If not, you don’t need gap insurance.
  • If you’re leasing your car, it’s a good idea to buy gap insurance if you aren’t already required to in your lease agreement.
  • If you own your car outright, you don’t need gap insurance.

Car insurance companies in Michigan

Scores are based on Insure.com’s “Best Insurance Companies” customer review survey of 3,700 customers. Companies not in the top 10 of market share do not qualify. All scores are out of 100.

Best car insurance companies in Michigan

Best customer service:

  1. USAA -- 100
  2. State Farm—92
  3. Allstate – 91.8
  4. Geico – 88.7
  5. Progressive – 88.4

Best claims service:

  1. USAA – 100
  2. Liberty Mutual – 96
  3. Geico –93.9
  4. Progressive – 92.5
  5. State Farm – 91.8

Best value for the price:

  1. USAA – 91.3
  2. Progressive – 86.3
  3. State Farm – 84.6
  4. Geico – 81.1
  5. Liberty Mutual – 80.4

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Largest car insurance companies in Michigan

Rank Company Name Direct premiums written Market share % Overall Customer Review Ranking
1 State Farm Group 1,496,940 18.56% 90.4
2 Auto Club Group 1,287,045 15.96% n/a
3 Progressive Insurance Group 885,241 10.98% 89.6
4 Auto-Owners Insurance Group 775,363 9.61% n/a
5 Allstate Insurance Group 726,139 9% 87
6 Hanover Insurance Group 462,349 5.73% n/a
7 Liberty Mutual Insurance Group 374,837 4.65% 86.4
8 Michigan Farm Bureau Group 365,506 4.53% n/a
9 USAA Group 215,755 2.68% 97.2
10 Geico 191,802 2.38% 88.1

Source: A.M. Best market share rankings are based on direct premiums written in 2015.

Customer review rankings based on Insure.com's 2016 "Best Insurance Companies" survey of 3,700 customers. Scores are out of 100.

Michigan car insurance laws

Residual coverage in MI

Bodily injury liability and property damage liability – 20/40/10 – must be purchased in Michigan. But in Michigan what they cover is different compared to other states. They are referred to as residual coverage. This is because the no-fault law protects insured drivers from being sued, and covers injuries regardless of fault. So your required liability coverages usually won’t come into play. However, there are specific situations in which you can be sued. These include:

  • If you cause an accident (in Michigan) in which someone is killed, seriously injured or permanently disfigured.
  • If you're involved in an accident (in Michigan) with a nonresident who is an occupant of a vehicle registered outside of Michigan.
  • If you're involved in an auto accident in another state.

If you’re sued for damages that exceed your liability limits, you will be responsible to pay the difference.

Mini-tort law in Michigan

The "mini-tort" portion of the Michigan no-fault law establishes another situation in which you can sue or be sued. Under this provision, if you're 50 percent or more at fault in an accident and caused damage to another person's car and that vehicle is not completely covered by the owner's insurance policy, then you may have to pay up to $1,000 in damages.

This law also allows you to sue, or claim against, another driver who is 50 percent or more at fault for damage to your car if it isn't fully covered by your own insurance policy. You can receive up to $1,000 from the other party. If you have collision coverage, you're able to sue for your deductible amount (up to $1,000) from the other party.

More on MI PIP: Lost wages, rehab, household expenses, deductibles

PIP coverage in Michigan also pays, up to a limit, for wages you would have earned if you had not been hurt, for up to three years. Currently, the maximum wage loss per month under MI PIP is $5,392. PIP benefits also include coverage for rehabilitation. You additionally get paid $20 a day for up to three years to pay for household tasks and home maintenance that you can no longer do because you are injured.

Typically you will have to pay a deductible for your PIP. This is the amount you are responsible for before your insurer pays out benefits. The deductible varies by insurer, but is usually $300 or $500 for each accident.

If you are killed in an accident, your policy will pay your dependents up to the monthly amount for three years.

Michigan auto reform

Legislators have long recognized that Michigan’s unique car insurance law – combining no-fault coverage and unlimited medical benefits – significantly contributes to costs, making Michigan’s rates the highest in the nation. To that end, various reform bills have been pitched over the years to rein in costs. The latest Michigan auto reform effort stalled when lawmakers, insurance companies and hospitals failed to reach an agreement on how to overhaul the existing law.

Michigan car insurance eligibility points

Car insurance companies in Michigan assign you insurance eligibility points for certain traffic violations. These points are used when deciding whether or not to sell you a policy. Note, however, that the eligibility points used by insurers are not the same as the points on your driving record.

You can be turned down for automobile insurance if you have 7 or more eligibility points from violations within the past three years.

Here is how Michigan car insurance companies assign eligibility points:

  • Driving more than 15 mph over the speed limit (careless driving) – 4 points
  • Driving 11-15 mph over the speed limit – 3 points
  • Driving 15 mph or fewer over the speed limit on freeways that used to have a maximum speed limit of 70 mph – 2 points
  • Other moving violations – 2 points
  • The first accident in which you are more than 50 percent at fault – 3 points
  • The second and subsequent accidents in which you are more than half at fault – 4 points

For a list of driver license points for infractions, visit the Secretary of State Michigan driver point system website.

Basic Driver Improvement Courses (BDIC)

If you are cited for a traffic violation, you may qualify to take a driver improvement course. If you pass, the course provider will notify the Michigan Department of State electronically. This means no points from the ticket will be tacked on to your driving record and state department will not show the ticket information to insurance companies. The ticket information (but not the points) is still placed on your record, though, and may be viewed by courts and cops.

The course costs up to $100 depending on the provider. If are eligible, you will be notified by mail about the Basic Driver Improvement Courses (BDIC) process. You may participate if you:

  • You have 2 or fewer points on your record
  • The violation was not in a commercial vehicle
  • The violation was not a criminal offense
  • The ticket you received is for 3 or fewer points, and not for a major offense such as DUI or not for careless or negligent driving

MI health insurance and car insurance discount coordination

You may get a lower PIP rate if you “coordinate” your coverage with your health insurance as long as you do not have Medicaid, Medicare or a Medicare supplemental policy. If you go this route, your no-fault policy will pay your medical expenses or lost wages after you have used all the benefits under your health or disability plan. Check with your health insurance company to make sure your policy will pay for injuries related to a car accident before you try to coordinate coverage.

Work Loss Waiver, discount for seniors and retirees

If you are age 65 or older, Michigan car insurance laws require insurers to offer you a discount if you drive your vehicle less than 3,000 miles a year. If you are age 60 or over with no salary from a job, you can also get a lower PIP rate by waiving coverage for work loss that is paid out under PIP. You can waive this coverage for yourself and your eligible retired spouse, but you must still carry it for other persons who may be injured in your car or by your car in an accident.

How much does a speeding ticket raise your rates?

If you are convicted of speeding, your car insurance rates will go up 28 percent, on average, per year, according to an analysis of rates from six insurers for 10 ZIP codes in the state.

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A dash camera is an in-car digital camcorder which is designed to be mounted on your car windscreen and has a wide angle lens to capture footage of the field-of-view which is in front of the car. The camera will come supplied with an 8GB memory card along with charger, USB cable, windscreen suction mount, instruction manual. The video is set to record on a loop as you are driving and when the memory is full the camera will re-write over the old footage. If in the unfortunate event of a crash you should be able to watch back the last few minutes of recording on the video to see the incident unfold. Many people are using dash cameras as a form of evidence to prove they were not the person who caused the accident or to simply have peace of mind of what actually happened. Other people are using dash cameras to simply catch funny everyday events that happen them whilst out driving.

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Car Insurance Guide

Some people may find it a challenge to look for cheap car insurance. However, it is usually a good idea for people to understand the options available to them before they shop around. If someone understands the type of car insurance that would best work for them, they may then be able to compare car insurance of that type. This could potentially bring them a better deal than they might otherwise have found.

Everyone who owns a car should have car insurance

This is a legal requirement. A second driver may be able to drive another person’s vehicle if they are covered under the insurance terms that individual has in place. However, everyone who has their own vehicle in Northern Ireland and the UK should have some form of car insurance NI in place to cover them for anything that may occur.

The different types of car insurance that may be chosen

There are different options available when it comes to choosing car insurance. An individual who owns a car may consider the cost of replacing that vehicle or repairing it, and how much it is worth. This usually helps assess the best type of policy for that person to buy.

Third party:

This is the basic form of car insurance Northern Ireland residents may get. It usually covers the driver for any damage their car does to another vehicle if they are found to be at fault for causing an accident. It wouldn’t tend to cover the damage done to their own car, however.

Third party, fire and theft:

As the name suggests, this form of insurance provides cover for third party damage, but it also could provide cover for incidents of theft and fire damage. Thus if the car was stolen or set fire to, the car owner may receive a payout in accordance with the terms of the policy.

Fully comprehensive:

This may be a smart choice for someone who owns a brand new or expensive car that could cost a significant amount to repair after an accident or if it were stolen. The key aspect people may remember about this policy is that even if they were at fault for causing an accident, their insurance could cover the damage done to any other vehicle, as well as providing a payout for their own.

Shopping around to look for a good deal

There are many insurers on the market today, and any one of them may offer just the right deal a particular person is looking for with regard to car insurance. It could work well to perform an online comparison, because it allows an individual to compare different deals and prices from a range of different providers.

It could also work well to compare the small print. No two insurance quotes are likely to be identical in terms, which means a person could get a better price simply by comparing the minor details. If they ever needed to claim on their policy, they may look back and be glad they did this.

Temporary car insurance

This may be a good choice if someone only has the need to use a particular car for a short period of time. This form of insurance could be taken out for between one and 28 days. This form of insurance could be used in situations where someone has an opportunity to borrow a vehicle, either from a family member or a friend. They may not be covered by that person’s insurance policy, which means they may need to source an appropriate policy to provide the cover they need.

Again, shopping around could open the way to find car insurance cheap deals instead of paying more than might be necessary.

Driving a car for business purposes

While some people are given business vehicles to use in the course of their work, others are self-employed. If someone has their own business and they intend to use their regular car to make business journeys, their car insurance might need to reflect that. If it doesn’t, the individual may find any accident they have while on a business-related journey could render their insurance invalid. This is why it is important to make sure the proper insurance cover is in place.

Even if a person only uses their car for the occasional business journey, it is worth noting that journey may not be covered in terms of any accident or damage that may occur. Thus the proper insurance may need to be sourced from a company that could provide the right cover for the right situation.

Reducing the cost of car insurance

Shopping around could be the best way to reduce costs associated with any type of car insurance policy. By comparing details and prices from a variety of companies, it may be easier for an individual to assess whether or not they could be saving money by going with one company instead of another.

By assessing the type of insurance needed and the specific insurance company they might go with, the opportunity may be there to save money on a regular car insurance policy. This may be true regardless of whether that individual is renewing a policy on an existing vehicle, or looking for a new policy for a new car they have just bought.

Either way, it is probably easy to see the importance of looking for the best insurance for any car, regardless of age or condition.

Car insurance Q&A

Where to get car insurance quotes?

Getting a car insurance quote is usually relatively straightforward. A person looking for car insurance cover could contact individual companies to get a quote and they could then take up the quote of the company they feel happiest with. It could also be possible to search for car insurance quotes online by using a comparison company that might give several quotes from different insurers all in one go. A person might receive a renewal quote from their existing insurance company if they have had a policy previously.

Where to check car insurance?

A person looking for a new policy could check for a quote with any NI insurer. They could also check that a quote is competitive by looking to compare car insurance from a range of providers. This way they could see easily that a policy is around the same price or they could check to see if a renewal quote could be beaten.

Where is car insurance cheap?

There isn’t typically any guarantee that a car insurance policy could be cheap. However, there could be ways of reducing the price paid for insurance by using online tools like a comparison to ensure the price is as cheap as it can be. Often using a comparison to search for a cheap car policy could be the best way and could also save time.

Where are car insurance rates the highest?

Some people might think that car insurance rates are higher in a particular place but the best way of finding out for sure could be to compare car insurance. This way a driver could be presented with a range of quotes which may vary in price. They could then decide which one best suits their needs. It might be that at renewal a person is quoted a much higher rate for car insurance, in which case it could be preferable to shop around.

Where is car insurance mandatory age?

Car insurance in Northern Ireland is typically mandatory in order to drive a vehicle on NI roads at any age above the legal age of driving, assuming that a valid driving license is in place.

Where car insurance goes down?

It is generally assumed that car insurance goes down for drivers over the age of 25 but there is actually no guarantee that this is the case. Often the best way to check is to contact insurance companies or carry out a comparison online in order to find out the best and cheapest quote.

Which car insurance is best for new drivers?

New drivers might struggle to find insurance that is cheap but shopping around may really help someone avoid the very highest priced policies by checking against a range of others based on their needs. Each quote for an individual is unique so therefore there isn’t usually a prescribed best place to go for insurance for new drivers.

Which car insurance to get?

Getting car insurance might be a very individual choice as a quote could vary depending on a person’s driving experience and circumstances. Doing research in advance of taking out a policy by comparing different quotes could be the best strategy for getting a good deal.

Who pays car insurance claims?

When valid insurance is in place then it is typical that the company that offers the cover pays out any claim on a policy. An individual could be liable if the insurance isn’t valid for some reason following investigations surrounding a claim.

Who pays car insurance excess?

In the event of a car insurance claim then it could vary as to who pays the excess. If a policy holder is at fault then they themselves will pay the excess on the policy. This is the fee payable prior to any pay out being made. If that person is not at fault they may still have to pay the excess but it could be recoverable by the insurance company from the person that is determined to be at fault.

Who does car insurance cover?

Car insurance tends to be a legal requirement and it may cover the named parties on the policy. This could be the owner of the vehicle and anyone else they cite as a named driver on the policy. A policy might also cover people involved in an accident depending on the level of cover taken out and the nature of their injuries as well as the circumstances surrounding an accident.

Who needs car insurance?

A person that wishes to drive a vehicle on roads in Northern Ireland could usually require a car insurance policy in place.

What car insurance covers theft?

There tends to be different levels of cover for car insurance. In order to cover theft then a driver would usually need to opt for either comprehensive cover or third party fire and theft cover.

When does car insurance go up?

It really could depend on a person’s individual circumstances but having an accident or getting driving penalties could mean that a quote for car insurance could be higher than without those things in place.

When does car insurance start?

The date for car insurance starting is usually down to the individual driver. For a new policy they would typically set the date they wanted cover in place from. A policy usually runs for 12 months. If a person already has insurance in place then they could receive a renewal at the end of a policy that will tend to continue from the expiry of the previous cover.

Why car insurance premium increase?

A premium could increase if a person has an accident or if they receive driving penalties.

Why car insurance is important?

Car insurance could be described as important as it usually a legal requirement and also could offer valuable protection to vehicle owners and passengers.

How car insurance works UK

In the UK and NI then car insurance is usually mandatory by law. A policy could offer protection in the case of an accident, theft or damage and could pay out depending on who is decided to be at fault.

How car insurance companies make money

Car insurance companies tend to charge individuals a premium that relates to the costs of cover. They then usually work with other insurers to reach decisions in the event of an insurance claim.

Are car insurance brokers cheaper?

There are no guarantees that a car insurance broker is cheaper than going direct to an insurance company but it might be beneficial to compare car insurance in order to know for sure.

Are car insurance companies open on weekends?

It tends to depend on the individual company but typically a car insurance company could have weekend opening hours.

Are car insurance companies regulated?

Yes – by the Financial Ombudsman Service.

Are car insurance rates negotiable?

When a person is searching for car insurance they could negotiate on price ahead of taking out a particular policy.

Are car insurance premiums tax deductible?

If a car is used for personal use only then car insurance probably isn’t tax deductible. If used for business use as well then a proportion of the running costs associated with a business may be tax deductible.

Are car insurance premiums paid monthly?

Car insurance could be paid monthly or annually and this tends to be determined at the start of a policy. Monthly payments are likely to work out slightly more overall than if a person pays for a whole year up front.

Are car insurance quotes accurate?

In order to receive an accurate quote then providing as much information as possible up front could be important. Quotes are tailored to individual circumstances and if these aren’t accurate then the chances are the quote may not be either.

Are car insurance rates going up?

The cost of car insurance usually goes up in line with the cost of motoring. This could be added to depending on the impact of invalid claims on the overall insurance market.

*51% of consumers could save £200. We split the providers on our system into different categories. We then selected quotes from the high volume sales providers as well as quotes from other providers which returned a price. Based on UK insurance market share data made available by the ABI, by way of a weighted selection process, we selected the cheapest of either the high volume sales providers or other providers (“the cheapest selected quote”). We then compared the cheapest quote on our system against the cheapest selected quote. We then took the savings figure which 51% or over could have saved using that formula. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.

*Purchase a car insurance policy through CompareNI.com and claim your free dash board camera ( Subject to Terms and conditions)

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