Michigan Car Insurance Rates and How They Are Set

Michigan car insurance rates are set by each insurance company but cannot be sold until the state signs off. The Michigan Department of Insurance and Financial Services (DIFS) says it reviews and approves every auto insurance rate filing before it is available for consumers to purchase, and that auto rates and policies must be filed with and approved by DIFS before they are offered ¹. Michigan is also a no-fault state with its own set of coverage choices, most of them created by the 2019 no-fault reform (Public Acts 21 and 22 of 2019), which applies to policies issued or renewed after July 1, 2020 ¹.

That reform requires auto insurers to reduce statewide average personal injury protection (PIP) medical premiums for eight years, and DIFS has used outside actuaries to check that filings meet those reductions and avoid banned rating factors ^{1 2}. Statewide averages say little about any one bill, though. Our guide to why car insurance goes up covers the personal reasons a renewal can rise.

Under DIFS's description, Michigan works as a prior approval state for auto insurance: an insurer files its rates and policies with DIFS, and DIFS approves them before they reach consumers ¹. The 2019 reform added two rules that shape every filing.

• Mandatory PIP medical reductions. For policies issued or renewed after July 1, 2020, each insurer had to deliver average per-vehicle PIP premium reductions of at least 45% for the $50,000 PIP option, 35% for the $250,000 option, 20% for the $500,000 option and 10% for unlimited coverage ². DIFS describes these as statewide averages that continue for eight years ².
• Banned rating factors. Michigan Compiled Laws section 500.2111 says an insurer shall not establish or maintain auto rates or rating classifications based on sex, marital status, home ownership, educational level attained, occupation, the postal zone in which the insured lives, or credit score as provided in section 2162 of the code ⁴. The same section still lets insurers group auto risks by territory ⁴.

Section 500.2111 also requires insurers that have not set up a senior citizen discount plan to offer reduced rates to drivers 65 or older who drive less than 3,000 miles a year ⁴.

On September 23, 2026, DIFS said Governor Gretchen Whitmer had signed Senate Bill 1013, which prohibits insurers from using price optimization, the practice of varying premiums based on a customer's willingness to pay more ⁶. DIFS said the law codifies a March 2024 department bulletin that found price optimization unfairly discriminatory and not permitted under Michigan law, and that DIFS reviews auto, homeowners and other property and casualty rate filings to make sure it is not occurring ⁶. Our explainer on what a rate filing is covers what those filings contain.

In a November 16, 2021 release, DIFS reported that aggregated data from approved rate filings showed average statewide PIP medical reductions, compared with the average statewide rate on May 1, 2019, of 25% for unlimited coverage, 39% for $500,000, 48% for $250,000 and 62% for $50,000 as of July 2, 2021 ⁵. DIFS noted those are statewide averages and that individual results differ with coverage choice, driving record and claims history ⁵. These are the most recent statewide PIP figures we found from DIFS; they describe 2021, not today's prices.

DIFS lists three basic coverages that must be bought and carried on every Michigan vehicle: personal injury protection, property protection insurance and residual bodily injury and property damage liability ¹. Driving without insurance is a misdemeanor punishable by a fine of up to $500 and up to one year in jail, and a court may suspend a license for 30 days or until proof of insurance is shown, according to DIFS ¹. Our guide to what happens if car insurance lapses covers how a gap can affect price.

At each new policy or renewal, the named insured chooses one PIP medical level under Michigan Compiled Laws section 500.3107c ³. DIFS lists six options: unlimited coverage, $500,000, $250,000, $250,000 with exclusions for household members who have qualified health coverage, $50,000 for people enrolled in Medicaid, and no PIP medical coverage for people with Medicare Parts A and B, with conditions on household members for the last three ^{1 2}. If no choice is made, the policy carries unlimited PIP medical coverage by default ^{2 3}. Wage loss, replacement services and funeral benefits stay in the policy even when PIP medical is excluded or opted out ¹.

For the exclusion options, qualified health coverage means Medicare Parts A and B or a health plan that does not limit or exclude auto accident injuries and has a deductible at or below a level set by state law; DIFS says that level is $6,579 or less for July 1, 2026 to June 30, 2027 ¹.

If a driver does not choose bodily injury and property damage liability limits, the default is $250,000 per person and $500,000 per accident for injury or death, plus $10,000 for property damage in another state ¹. The lowest limits that can be bought are $50,000 per person, $100,000 per accident and $10,000 for property damage in another state ¹. Property protection insurance pays up to $1 million for damage a car does in Michigan to other people's property, such as buildings, fences and properly parked vehicles ¹. Under Michigan's mini-tort rule, a driver 50% or more at fault can be sued for up to $3,000 in vehicle damage not otherwise covered by insurance ¹. Our page on the price gap between minimum and full coverage explains how limit choices change a premium.

Michigan policies also carry a per-vehicle fee from the Michigan Catastrophic Claims Association (MCCA), which reimburses insurers for large PIP medical claims ¹. The MCCA announced that starting July 2026 the fee is $84 for drivers selecting unlimited PIP and $19 for those selecting other limits, compared with $82 and $23 before ⁷. Only drivers with unlimited PIP pay the pure premium part of the fee; the rest is a deficit recoupment charge paid by all ⁷.

A statewide average reduction is an average. A renewal can still rise because of a new violation or at-fault accident, a different vehicle, a driver added, a change in PIP or liability choice, a change in health coverage that affects PIP eligibility, or a discount that ended. Our page on whether car insurance rates are going down explains why averages and single bills often move differently, and our guide to reading a renewal notice shows where the reasons usually appear. Asking the insurer or agent which factors changed is a reasonable first step, and you can compare quotes from several insurers to see whether a price is in line with others.

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DIFS takes questions and complaints about auto insurance companies, agents and agencies Monday through Friday from 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437), and also accepts complaints online ¹. Its 2026 releases list a consumer hotline of 877-999-6442 ⁶. The DIFS complaint page explains the online complaint process and the forms for complaints that must be sent by email, fax or mail ⁸.

For a question about a specific claim, start with your insurer and then DIFS; we do not give claims advice. QuotePitStop is a lead-generation service, not an insurance company, agent or broker.

• ¹ Official record: DIFS's auto insurance FAQ, prior approval of rate filings, the eight-year PIP reductions, the required coverages, penalties for driving uninsured, PIP options, the $6,579 qualified health coverage deductible, default and minimum liability limits, the $1 million PPI, the $3,000 mini-tort and the 833-ASK-DIFS line, checked October 13, 2026.
• ² Official record: DIFS's PIP choice page, the six PIP medical levels, the unlimited default and the mandated 45%, 35%, 20% and 10% average reductions, checked October 13, 2026.
• ³ Official record: Michigan Compiled Laws section 500.3107c, the PIP coverage levels and the no-limit default, checked October 13, 2026.
• ⁴ Official record: Michigan Compiled Laws section 500.2111, the banned rating factors, territory rating and the senior discount for drivers under 3,000 miles a year, checked October 13, 2026.
• ⁵ Official record: DIFS's November 16, 2021 release, the average statewide PIP medical reductions of 25%, 39%, 48% and 62% as of July 2, 2021, checked October 13, 2026.
• ⁶ Official record: DIFS's September 23, 2026 release on Senate Bill 1013 and price optimization, and the 877-999-6442 hotline, checked October 13, 2026.
• ⁷ Reported: the MCCA's October 8, 2025 announcement of the $84 and $19 per-vehicle fees from July 2026 and the prior $82 and $23, checked October 13, 2026.
• ⁸ Official record: DIFS's complaint page, checked October 13, 2026.