How To Save On Car Insurance in Michigan
Here are the top 8 ways for how to save on car insurance in Michigan:
- Drop collision coverage
- Use an independent insurance agency to comparison shop for the best premiums
- Opting out of No-Fault medical coverage
- Select coordinated coverage
- Select a deductible
- Select the managed care option
- Cancel comprehensive coverage
- Choose lower liability limits
I have previously given my own recommendations as an auto accident attorney about the insurance coverages that drivers should carry to best protect themselves and their families, which you should review with your insurance agent.
We recommend that you consider both our tips for saving money on auto insurance and our recommendations for the most protective car insurance coverage and decide what’s best for you and your family.
Of course, if you ever have any questions, we’re always here to help. Call or reach out to us through our website for a free, no-cost, no-obligation consultation with one of our experienced auto accident attorneys.
We are also happy to recommend an independent insurance agency for you to comparison shop and get quotes to protect you and your family.
Drop collision coverage
You will see the biggest savings by far on your overall car insurance bill in Michigan if you drop your collision coverage.
For most people, collision coverage constitutes as much as 50% of your total insurance premium. That means that collision coverage is the single biggest driver of costs and the single biggest part of your car insurance premium.
As a result, if you cancel you collision coverage, you could actually have some very meaningful savings.
However, this may not be an option if you have a loan on your vehicle or if you lease.
Use an independent insurance agency to comparison shop for the best premiums
Your best bet for how to save on car insurance in Michigan is to use an independent insurance agency to comparison shop every year.
You want an independent insurance agency that represents multiple companies. That way they can get you rate quotes from each company for the same coverages and the same protections that you want to purchase.
By comparing the different quotes, you can identify which insurance company will be the best fit for you and your family.
You will be astonished at how much money you’ll be able to save.
Think of it as paying for cable when the only cable provider in your area is Comcast, or paying for cable when there are multiple companies that offer service.
Working with an independent agency ensures you will get the best prices. Insurance agencies that quote from only one insurance company, like State Farm or Allstate, can’t match the best prices.
You will want quotes to include:
- The difference in premium for each of the No-Fault PIP medical coverage levels (but I still strongly recommend you pay more for unlimited No-Fault medical coverage).
- The difference in premium if you get coordinated coverage where health insurance is primary.
- The difference in premium depending on which deductible you choose.
- The difference in premium if you drop collision, comprehensive, mini tort, UM and UIM.
How to save on car insurance in Michigan by opting out of No-Fault medical coverage
You may be able to save money on car insurance in Michigan by eliminating your No-Fault medical coverage premium if you select the PIP medical “exclusion” that is available to drivers with qualified health coverage who choose the $250,000 No-Fault PIP medical benefits coverage level. (MCL 500.3109a(2); 500.3107c(1)(b)).
Most people will likely know it as “Option 4” on the “Michigan Selection of Personal Injury Protection (PIP) Medical Coverage” form that auto insurers will ask you to fill out when you’re purchasing your Michigan No-Fault auto insurance policy. (See DIFS Bulletin 2023-11-INS to see a sample form)
Provided that you and your spouse and any relatives who live in your home have qualified health coverage, selecting this “exclusion” to opt out of No-Fault medical coverage means that your premium for No-Fault medical coverage “must be reduced by 100%.” (MCL 500.3109a(2)(a))
This means that you will need to rely exclusively on your health insurance for medical expenses and costs after an accident, not No-Fault. Drivers – and their spouses and resident relatives – who avail themselves of this exclusion will “not [be] eligible for personal protection benefits under the insurance policy.” (MCL 500.3109a(2)(c))
Your health insurance plan or coverage qualifies as “qualified health coverage” under Michigan’s No-Fault insurance law if it “does not exclude or limit coverage for injuries related to motor vehicle accidents” and “[a]ny annual deductible for the coverage is $6,000.00 or less per individual.” (MCL 500.3107d(7)(b)(i))
How to save on car insurance in Michigan by selecting coordinated coverage
You may be able to save money on car insurance by selecting coordinated coverage, which would entitle you to “a reduced premium.” With coordinated coverage, your health insurance would be first in line before your No-Fault insurance to pay for any accident-related medical expenses. (MCL 500.3109a(1))
The law states that the “amount of a premium reduction . . . must appear in a conspicuous manner in the declarations for the policy, and be expressed as a dollar amount or a percentage.” (MCL 500.3109a(4))
What you need to know about relying on health insurance
On the one hand, health insurance is good because under the federal Affordable Care Act, health insurance plans cannot impose lifetime or annual limits on coverage.
On the other hand, health insurance does not always cover all of the necessary treatment, care and services that seriously injured accident victims need to recover from spinal cord injuries and traumatic brain injuries.
Additionally, for many employer-provided plans, accident victims have to contend with ERISA liens on their third-party recoveries for pain and suffering compensation, which some health insurance plans use to recoup the money they have spent on medical expenses and costs.
How to save on car insurance in Michigan by selecting a deductible
You may be able to save money on car insurance in Michigan by selecting a deductible on your No-Fault medical coverage. You will save more if you select a higher deductible. The law requires that “a deductible of a specified dollar amount” must be accompanied by “appropriately reduced premium rates.” (MCL 500.3109(3))
How to save on car insurance in Michigan by selecting the managed care option
I do not recommend you select the managed care option, but doing so may save you some on car insurance in Michigan because the law requires that auto insurers “provide a discount that reflects reasonably anticipated reductions in losses or expenses or both.” (MCL 500.3183(b))
However, I continue to strongly advise against selecting the managed care option to save on car insurance in Michigan. You can read why here.
Savings or no savings, the managed care option will do nothing to provide better protection or better medical treatment and care for accident victims. If anything, based on the doctors these insurance companies will use for the managed care option, accident victims will be significantly worse off with managed care. From time to time I put my cross-examinations of some of Michigan’s most notorious and nasty insurance medical examiners on this blog for people to read and understand just how biased and horrible they can be during these so-called “independent medical examinations.” These will largely be the same doctors that most insurers will be using for the new managed care option.
As with the worst of HMOs, car accident victims will have no choice of doctor. You will be stuck with a “cut-off” doctor. Additionally, with managed care, victims will also be required to get written preauthorization in advance from the insurance company for all visits, diagnostic tests, procedures, surgeries and treatment. If a person fails to do so, the insurer can deny payment.
How to save on car insurance in Michigan by cancelling comprehensive
You may be able to save on car insurance in Michigan by cancelling your comprehensive coverage, but the savings will be minimal because the cost of this coverage is so relatively insignificant.
Choosing lower liability limits
You may be able to save on car insurance in Michigan by purchasing lower liability insurance limits – which you are able to do under MCL 500.3009(1)(a) and (b) and (5) – but as I’ve written previously, as an auto accident attorney, I strongly recommend against this.
Because of the new No-Fault reform law and the new PIP caps, your own liability risk is higher than ever before. The savings on car insurance in Michigan for choosing a lower liability limits of $50,000 instead of the new minimum RBI liability limits of $250,000 are not significant and they do not outweigh your increased exposure if you cause a serious auto accident. If you injure someone who has a lower PIP medical cap level, you could be liable for hundreds of thousands or millions of dollars of medical bills for this person’s lifetime care. The liability part of your bill is actually remarkably inexpensive, and the increased protection it offers for you and your family is well worth it.
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