Michigan is the state that is most closely identified with automobiles, and the car's impact can be felt at all corners of the state. The roads are wider in Detroit than most cities to encourage driving, and many Michigan residents work at Ford and GM plants. So, you might assume that in a place with such a doting relationship to the automobile auto insurance would be fairly affordable, right? Wrong. Michigan consistently ranks among the top five states in the nation for high auto insurance, and in recent years the average price for car insurance in Michigan has remained more than $2,000 per year.
Part of the reason for Michigan's pricey auto insurance is a state law that provides unlimited medical benefits to accident victims for life. That's great for victims of car accidents, but for the average driver, it can take a hit on your wallet. Additionally, Michigan car owners are required to buy personal injury protection coverage as part of their policy, which cost $145 per vehicle in 2012.
Michigan has been hit harder than most places by the recent economic recession, and one possible consequence of Michigan's high car insurance costs is people who can't afford to pay the rates. For example, in 2011, 17 percent of drivers in Michigan had no insurance. That puts a pinch on insurance companies, because they have to absorb the losses when uninsured drivers get in accidents, and possibly results in a negative feedback loop that makes a bad situation worse.