Yes – Michigan Auto Insurance is the highest premium you will pay in the United
By Kristine Reed, CPCU, AAI
How and why did this happen? My theory and many others agree is that it dates back
to when Michigan changed its Automobile Insurance Law to a No-Fault system on
October 01, 1973 under Governor William Milliken. Prior to this date, Michigan
operated under a tort liability system in which fault in an accident had to be determined
before benefits could be paid. The tort system was cumbersome and inefficient and
gave rise to excessive legal and administrative fees. Additionally, most at-fault parties
had insufficient insurance to cover the injured party’s damages, which resulted in under-
Under current Michigan law, no-fault insurance is required in order to register a vehicle.
Payments for collision damage, medical treatment, and wage loss are administered by
one’s own insurance carrier. Disputes over who is at fault are irrelevant when making a
claim for benefits. In exchange for this uncomplicated access to no-fault benefits, the
injured party can sue only in the case of serious injury, disfigurement, or death.
Michigan’s law is unique because it offers unlimited medical and rehabilitation benefits,
while other states place a monetary cap on these benefits. Under Michigan no-fault
law, an insured is entitled to personal injury protection
The insurance companies portion of the damages if you are injured are $555,000, after
that dollar amount is reached the state of Michigan pays your medical benefits from a
fund. There is a fee accessed to each insured vehicles (currently $196.00 per year) to
keep the fund going.
As long as Michigan does not cap these benefits and control the charges from medical
providers as other states do we will continue to see our automobile insurance rise each
year and see more motorists operate without the required insurance.
The latest attempt to reform the Michigan No Fault Insurance System was defeated in
February, 2018. We can hope for more efforts for relief in the future, in the meantime,
review your coverage and talk to your agent to see what you can do to obtain the best
possible rate for your situation.
Kristine Reed, CPCU
ISU Great Northern Insurance Agency