Michigan’s Auto Insurance Rates Have Declined — But They’re Still “Completely Unaffordable” for Many Drivers

When the 2019 auto insurance reform law passed the state Legislature, there was a lot of hope that the new rates would put less financial pressure on drivers. But wide geographical gaps in what people pay for auto insurance still persist. 

“Should auto insurers be health insurers, is kind of a big question? In most states, auto insurers are not health insurers.” –Amanda Nothaft, University of Michigan’s Poverty Solutions

While a new analysis from University of Michigan’s research group, Poverty Solutions, demonstrates that rates have fallen by nearly 20% since 2019, those rates remain some of the highest in the country. And the racial disparities that existed before the law haven’t abated. 

Listen: The successes and failures of Michigan’s 2019 auto insurance law.

Guest

Amanda Nothaft is a senior data and evaluation manager at Poverty Solutions at the University of Michigan. She is also the co-author of a new policy brief titled “Building on Michigan’s auto insurance reform law.” While rates have dropped since the law was enacted, they still remain “completely unaffordable” for many Michiganders, particularly for Detroit residents, says Nothaft.

One of the questions that persists in Nothaft’s mind is whether higher rates associated with personal injury protection (PIP) are even necessary. “Should auto insurers be health insurers, is kind of a big question?” she asks. “In most states, auto insurers are not health insurers.”