Michigan's 2019 auto insurance reform saved drivers an estimated $357 per year compared to what rates would have been without changes. However, due to inflation and market forces, drivers still pay about $200 more annually than they did in 2019. The reform gave Michigan drivers PIP coverage choices for the first time, but results have been mixed.
Back in 2019, Michigan passed what was supposed to be a game-changing auto insurance reform. The promise? Lower rates and more coverage choices. The reality? Well, it's complicated.
If you're a Michigan driver wondering whether the reform actually helped your wallet, you're not alone. Let's break down what really happened since the law took effect in July 2020.
What the 2019 Reform Actually Changed
Before we dive into the numbers, here's what actually changed when Governor Whitmer signed Public Acts 21 and 22 of 2019:
Goodbye Mandatory Unlimited PIP
The biggest shift? Michigan drivers were no longer required to carry unlimited lifetime medical coverage (Personal Injury Protection, or PIP). For decades, Michigan was the only state forcing everyone to buy unlimited coverage—which made our premiums the highest in the nation.
The new law created six PIP coverage options:
- Unlimited coverage (the old standard)
- $500,000 in medical coverage
- $250,000 in medical coverage
- $50,000 (only for Medicaid enrollees)
- Opt-out entirely (only for Medicare recipients)
- Exclude specific individuals who have qualifying health insurance
About 30% of Michigan drivers chose lower PIP coverage limits by 2024, opting for less than unlimited coverage to save money.
Insurance Companies Can't Use These Factors Anymore
The reform also prohibited insurers from using certain factors to set your rates:
- Gender or sex
- Marital status
- Credit score
- ZIP code
- Home ownership
- Education level
- Occupation
This was supposed to make rates fairer, especially for Detroit residents who faced massive premiums due to their ZIP codes.
Fee Schedule for Medical Providers
Perhaps the most controversial change involved capping reimbursement rates for medical providers treating car accident victims. The law created a fee schedule limiting what hospitals and clinics could charge for PIP-related care—a move designed to reduce insurers' costs (and theoretically, your premiums).
The Promised Savings: 16% Rate Cuts
When the law passed, insurers were required to reduce rates by at least 16.5% for policies issued or renewed after July 1, 2020. Sounds great, right?
Here's the thing—that was a one-time mandated cut. What happened after that initial reduction tells a very different story.
What Actually Happened to Michigan Rates
The Good News
A December 2024 report from Milliman (commissioned by the Michigan Department of Insurance and Financial Services) estimated that drivers are spending an average of $357 per year less than they would have without the reforms. That's real money saved—just not in the way most people expected.
Michigan also dropped from being the absolute most expensive state for car insurance to merely being in the top 10. Progress, I guess?
Additionally, average rates have decreased by nearly 18% statewide since their 2021 peak.
The Bad News
Despite the reform, Michigan drivers are paying roughly $200 more per vehicle annually compared to what they paid in 2019. So while rates are lower than they would have been, they're still higher than before the reform.
How is that possible? Two words: inflation and market conditions.
Insurance rate hikes in 2023 and 2024 meant that the initial 16.5% savings were largely erased by nationwide inflationary pressures affecting the entire auto insurance market.
Current Michigan Rates (2026)
As of 2026, Michigan drivers pay an average of $3,156 annually for full coverage auto insurance—still among the highest in the nation. That's about $263 per month.
For context, the national average is around $1,674 per year. Michigan drivers pay nearly double what drivers in other states pay.
Did Everyone Save Money?
Not even close. The impact varied wildly depending on where you live and what coverage choices you made.
Detroit Drivers Still Struggling
Even with ZIP codes banned as a rating factor, Detroit drivers still pay about $1,500 more annually than drivers in suburban areas. Insurance companies found other legal ways to charge higher premiums in the city—factors like higher theft rates, more uninsured drivers, and accident frequency.
The Uninsured Rate Actually Went Up
Here's an unintended consequence: Michigan's uninsured driver rate jumped from 17.2% in 2019 to 20.2% in 2024. That means more than one in five Michigan drivers is on the road without insurance.
Why? Even with the reform, insurance is still expensive. Some drivers who qualified for lower PIP limits still couldn't afford coverage.
- The reform technically saved money compared to doing nothing, but rates are still higher than 2019
- 30% of drivers chose lower PIP coverage to reduce premiums
- Detroit and urban drivers still pay significantly more than suburban drivers
- The uninsured driver rate increased by 3 percentage points since reform
- National inflation erased much of the initial mandated rate cuts
Choosing Your PIP Coverage Level: What You Need to Know
One genuinely helpful aspect of the reform? You now have choices. But choosing the right PIP level isn't simple.
Should You Keep Unlimited Coverage?
Unlimited PIP coverage is expensive, but it provides true peace of mind. If you're seriously injured in a car accident, your medical bills could easily exceed $500,000 over a lifetime of care.
Consider unlimited coverage if:
- You don't have comprehensive health insurance
- Your health insurance has annual or lifetime caps
- You're the primary breadwinner and your family couldn't afford ongoing medical costs
- You drive frequently or have a long commute
When Lower Limits Make Sense
Dropping to $500,000 or $250,000 can save you hundreds of dollars per year. This might work if you have excellent health insurance through Medicare, Medicaid, or a comprehensive employer plan that would cover auto accident injuries.
Before reducing your PIP coverage, check with your health insurance provider to confirm they'll cover injuries from auto accidents. Some health plans exclude or limit coverage for car accident injuries.
What's Next for Michigan Auto Insurance?
The reform isn't finished. Lawmakers continue discussing potential tweaks and adjustments to address ongoing issues.
Rate Reduction Requirements Continue
For policies issued or renewed in the year beginning July 1, 2026, automobile insurers must make filings demonstrating compliance with continuing rate reduction requirements. Insurers need to show they're passing savings to consumers.
Projected Rate Increases
Despite the reform, an August 2025 estimate from Insurify projected Michigan drivers could see a 16% or higher premium increase by the end of 2025 compared to 2024. This tracks with national trends—the average U.S. car insurance premium is 55% higher than pre-pandemic levels.
Bottom line? Michigan's price controls didn't make the state immune to nationwide inflation in the insurance market.
How to Save Money Despite High Rates
Since Michigan rates remain stubbornly high, here are practical ways to reduce your premiums:
Shop Around Every Year
Insurance companies price differently. One insurer might quote you $3,500 while another offers $2,400 for identical coverage. Get quotes from at least three companies annually.
Bundle Policies
Most insurers offer 15-25% discounts when you bundle auto and homeowners or renters insurance.
Review Your PIP Choice
If your circumstances changed—you got Medicare, enrolled in Medicaid, or got better health insurance through work—you might now qualify for lower PIP limits.
Increase Deductibles
Raising your comprehensive and collision deductibles from $500 to $1,000 can cut your premium by 10-15%. Just make sure you have enough emergency savings to cover the higher deductible if you need to file a claim.
Ask About Usage-Based Programs
Telematics programs that monitor your driving can save safe drivers 10-30% on premiums. If you don't drive much or drive carefully, these programs could offer significant savings.
Don't let your coverage lapse, even for a day. A lapse in coverage can increase your rates by 10-20% when you restart your policy, and it's a red flag to insurers.
The Verdict: Did Reform Work?
Depends who you ask, honestly.
On paper, the reform achieved some goals. Drivers have choices now. Rates are technically lower than they would've been without reform. Some of the most discriminatory rating factors are gone.
But in practice? Most Michigan drivers don't feel like they got the relief they were promised. Rates are still painfully high. More people are driving uninsured. And the gap between Michigan and other states remains enormous.
The reform helped—just not as much as anyone hoped. And that's the frustrating reality of insurance reform: it's easier to promise big changes than to actually deliver them.
Frequently Asked Questions
Insurers were required to cut rates by at least 16.5% for policies issued after July 1, 2020. However, subsequent rate increases in 2023-2024 due to inflation meant that by 2025, drivers were paying about $200 more annually than they did in 2019. The reform saved drivers an estimated $357 per year compared to what rates would have been without any changes.
It depends on your health insurance. If you have comprehensive health coverage through Medicare, Medicaid, or an employer plan that covers auto accident injuries, you might choose $250,000 or $500,000 to save money. If you don't have solid health insurance, unlimited PIP coverage is worth considering despite the higher cost—serious auto accident injuries can easily exceed $500,000 in lifetime medical costs.
Michigan is no longer #1, but it's still in the top 10 most expensive states. As of 2026, full coverage in Michigan averages $3,156 per year—nearly double the national average of $1,674. The reform helped Michigan drop from the absolute highest, but rates remain exceptionally high compared to most states.
No. The 2019 reform banned using ZIP code as a rating factor. However, insurers can still use other geographic factors like county-level accident rates, theft statistics, and claim frequency. This means Detroit drivers still pay significantly more—about $1,500 more annually—than suburban drivers, even without ZIP codes being directly used.
Two main reasons: inflation and nationwide market conditions. While the reform created a mandated rate cut in 2020, it didn't freeze rates permanently. National trends affecting all insurers—rising vehicle repair costs, more expensive medical care, supply chain issues, and increased accident severity—pushed rates back up across the country. Michigan wasn't immune to these forces, though rates did increase more slowly here than nationally.
- Bridge Michigan - Did Auto Insurance Overhaul Help Michigan Motorists?
- Michigan Department of Insurance and Financial Services - Auto Insurance Reform FAQ
- Michigan Auto Law - No-Fault Reform Explained
- Michigan.gov - Auto Insurance Frequently Asked Questions
- MoneyGeek - Average Car Insurance Cost in Michigan (2026)
- The Manchester Mirror - Michigan Auto Insurance Overhaul Impact Analysis