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Survey Says: Michigan Auto Insurance Rates are Highest in the Nation

Posted on: Monday, June 9th, 2014

Your 16 year old has passed his driver’s education course, and now you plan on holding true to your promise to buy him a secondhand car of his choice. At the car dealership, everything seems to be going well with your purchase, that is, until your agent tells you the amount that will be added to your car insurance premium. After hearing the price, you can feel your jaw almost fall off.

most expensive cities for car insurance

So how can car insurance be so expensive for teenagers? It all boils down to one determining factor: risk. Michigan auto insurance rates often base their quote on the driver’s experience, and since teenagers often have little to no driving experience yet, insurance companies will consider him to be high-risk.

Granted, inexperience is not the only reason that adolescents in Michigan face high insurance premiums; the type of car your kid drives, the area where he lives, and the deductible he chooses to pay all factor into the auto insurance amount. There’s also the fact that rates for car insurance in Michigan are the highest in the nation. A report by John Kuo for NerdWallet.com explains why this is so:

“Cities with the Most Expensive Car Insurance

 

1. Detroit, Michigan

 

Average annual premium: $10,723.22

 

The Motor City is known for its cars, but its car insurance premiums are the highest in the nation. In Detroit, drivers face high rates because of the city’s high crime rate and Michigan’s no-fault insurance system. Under state law, insurance companies must pay medical expenses, lost wages and property damage regardless of who caused an accident. The system is intended to reduce litigation costs and ensure prompt claim repayment, but many complain that costs have ballooned because lawmakers have not set a cap on claim awards.

 

Detroit’s annual insurance premiums are not uniformly high. We found that even within neighborhoods, Detroit’s annual insurance premiums varied greatly. […]“

With car insurance rates so high, it’s imperative that you find a car insurance company that can give you your money’s worth. Fortunately, you don’t have to look that hard; established auto insurance providers like Allied Insurance Managers, Inc. has a track record that speaks for itself and is matched by a great reputation. With their help, you can make the most of your investment, and your teen can drive with adequate coverage.

(Source: Most Expensive Cities for Car Insurance, NerdWallet, February 3, 2014)

Paul W. Kosmal

Senior Account Executive at Allied Insurance Managers, Inc.
Paul received a BBA from Western Michigan University, majoring in their renowned Sales and Business Marketing Program. Paul has also attained three prestigious Insurance Designations, Certified Insurance Counselor (CIC), Licensed Insurance Counselor (LIC) and Certified Professional Insurance Agent (CPIA)
Allied Insurance Managers, INC.