22 Factors That Affect Car Insurance Rates In Michigan

In Michigan, car insurance rates are affected by factors related to your driving behavior and vehicle, rather than personal details like credit or marital status. This is due to state laws that limit how insurers can assess risk. Key rating factors include your age, driving experience, accident and ticket history, how often you drive, and the type of vehicle you own. Vehicles that are more expensive to repair or more likely to be stolen typically cost more to insure, while features like advanced safety systems can help lower your premiums.

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Michigan car insurance rating factors defined

In Michigan, the rating factors are the unique, specific characteristics of the person and the vehicle for which an insurance company is being asked to provide coverage. Insurers believe these factors are predictors of both the risk involved in insuring the person and vehicle in question and the likelihood that the person may someday file a claim (and, thus, require the insurer to pay out benefits).

Non-driving factors and how they impact rates

Michigan law prohibits insurance companies from using non-driving factors such as gender, credit score, ZIP code, occupation, or education level to affect car insurance rates when calculating premiums. However, insurers may still use certain geographic or behavioral data that indirectly reflect these factors. While this approach is intended to promote fairness, it can still result in rate variations between regions and demographics.

Additional rating factors to know about

Another major influence that affects your car insurance rate is Michigan’s no-fault insurance system. Under this system, your own insurance company pays for medical expenses regardless of who caused the accident. Historically, our state required drivers to carry unlimited Personal Injury Protection (PIP), which contributed to some of the highest premiums in the country. Recent reforms now allow drivers to choose from different PIP coverage levels—or opt out entirely in some cases—giving more flexibility and potential for savings.

Additional factors that may affect your Michigan car insurance rates include the coverage limits you select, your deductible, and whether you add optional protections like collision or comprehensive coverage. Many insurers also offer discounts for safe driving, bundling policies, or completing defensive driving courses.

Understanding these rating factors can help you make informed choices when purchasing or renewing your auto insurance policy. By maintaining a good driving record, carefully selecting your coverage, and comparing quotes from multiple insurers, you can better manage your auto insurance costs.

22 Factors That Affect Car Insurance Rates In Michigan

Age
Gender
Location where a person lives
Marital status
Credit score
Profession
Driving history
Years of driving experience
Annual mileage
Use of vehicle
The actual vehicle
Safety rating of your vehicle
Size of your vehicle
Age of your vehicle
Likelihood of theft of your vehicle
Vehicle ownership status
Previous insurance coverage
Claims record
Insurance coverage levels
Insurance deductible levels
Discount options
Who is your insurance company?

1. Age

Insurers consider age as a factor that affects car insurance because the statistics show that drivers of different ages pose different risks. For example, teen drivers are more likely to drive recklessly and be involved in crashes whereas drivers in their 50’s are not.

2. Gender

Although many auto insurance companies take gender into account when setting rates – based on statistics suggesting different crash risks for men and women – there are states that prohibit gender as a factor that affects car insurance rates. Those states include: Hawaii; Massachusetts; Michigan (see MCL 500.2111(4)(a)); Montana; North Carolina; and Pennsylvania.

3. Location or where a person lives

The location where a person lives is a very popular factor that affects car insurance rates in Michigan among insurers. Of course, the state will matter because it will affect whether a person is purchasing No-Fault or tort-based insurance. Additionally, auto insurance companies factor in the ZIP code where a person resides. Insurers claim that ZIP codes tell them the following information, which affects risk: frequency of car accidents; car theft rate; vandalism rate; claims rate; fraudulent claims rate; weather; and the prevalence of uninsured drivers. In Michigan, auto insurers are prohibited from basing automobile insurance rates on the “postal zone in which the insured resides.” (MCL 500.2111(4)(f))

4. Marital status

Marital status is a factor that affects car insurance rates in Michigan for some insurers based on statistics that purport to show that married drivers present less of a risk for insurers than do single, divorced or widowed drivers. Not all states – such as Michigan (see MCL 500.2111(4)(b)) and Massachusetts – do not allow marital status to be used as a rate-setting factor.

5. Credit score

Use of a person’s credit score and/or credit history in the rate-setting process is called “credit scoring.” This is a factor that affects car insurance rates in Michigan because insurers believe that people with low or bad credit scores, as opposed to drivers with good or excellent credit, are more likely to file claims and those claims will be more expensive. Auto insurance companies in Michigan are barred from using a driver’s “credit score” to set premium rates. (MCL 500.2111(4)(g))

6. Profession

A person’s profession or occupation can be a factor that affects car insurance rates in Michigan if an insurer believes it will cause the person to be on the road more (or less) and if, based on the nature of the person’s job, an insurer perceives him or her to be more careful and cautious than people with different jobs. In Michigan, a driver’s “occupation” cannot be used as a factor for setting his or her auto insurance rates. (MCL 500.2111(4)(e))

7. Driving history affect car insurance rates in Michigan

Driving history is a factor that affects car insurance rates in Michigan which comes as no surprise. Insurers look at a person’s driving history when determining insurance rates. Specifically, insurance companies want to know about accidents (whether they are at-fault or non-at-fault), tickets and moving violations.

8. Years of driving experience

The number of years that a person has spent behind the wheel is a very important factor that affects car insurance rates in Michigan. Simply put, inexperience means greater risk. More experience means just the opposite.

9. Annual mileage

The more time that a person spends on the road every year, the greater
the risk is that he or she may be involved in an accident. More driving time,
more exposure.

10. Use of vehicle

How a person uses his or her vehicle is a factor that affects car insurance rates in Michigan. Insurers want to know if the car is being used to just do errands around town or whether it’s being used to commute long distances to work or school. Additionally, especially in this era of ride-sharing, insurance companies are particularly attuned to whether a vehicle is being used for personal or business purposes.

11. The actual vehicle

Car insurance companies want to know what the actual vehicle is that they’re being asked to insure. This helps insurers gauge how the vehicle will be driven. Insurance companies rely on statistics to predict how likely it is that the vehicle will be involved in a crash (and will result in a claim being filed). Additionally, knowing what the vehicle is allows insurers to estimate the potential cost of replacement parts.

12. Safety rating of your vehicle

It’s not uncommon for an auto insurance company to consider the safety rating of your vehicle as a factor that affects car insurance rates in Michigan as it may be a predictor of how likely – or unlikely – it is that the insured or a passenger could be injured in a crash, thereby requiring the insurer to payout on a claim for benefits.

The flip side of this is that insurers may view safety features such
as collision-warning and lane-departure systems as increasing the insurers’
risks in the event these features are expensive to repair or replace.

13. Size of your vehicle

This factor that affects car insurance rates in Michigan can cut two ways with car insurance companies. On the one hand, some insurers may view bigger vehicles as being safer than small vehicles in the event of a crash thus reducing insurance rates. On the other hand, other insurers may view larger vehicles as being more dangerous because they have bigger engines (which may induce some drivers to drive faster) and because the vehicle’s large size may lull drivers into a false sense of security, thereby causing them to drive less cautiously causing insurance rates to increase.

14. Age of your vehicle

This is a factor that affects car insurance rates in Michigan because a brand new vehicle will be more expensive to repair and/or replace than a vehicle that is five or ten years old; insurance rates will be higher for the newer vehicle than for the older one.

15. Likelihood of theft of your vehicle

If your vehicle is one that is highly coveted by car thieves, then you are likely to pay more car insurance. This is a factor that affects car insurance rates in Michigan because if the risk of your vehicle being stolen is higher, the insurers are going to want more in the way of premiums for taking on the risk. However, an insurer’s inclination to charge more may possibly be offset if you have a car alarm and/or other anti-theft features.

16. Vehicle ownership status

It makes a difference to insurers whether the vehicle you seek to
insure is owned by you or whether you’re leasing it and/or whether it’s
otherwise financed.

This is a factor that affects car insurance rates in Michigan because in many cases the terms of a lease or a financing agreement require a driver to purchase additional coverages that an owner might otherwise opt out of. Specifically, drivers who are leasing or financing a vehicle may be obligated to purchase comprehensive and collision coverage as well as “gap insurance.” Gap insurance covers the difference between the market value of a vehicle and the amount that’s still owed on the lease in the event that a crash “totals” a leased or financed vehicle.

17. Previous insurance coverage

If a driver has never had insurance (unless he or she is a young
driver who is driving for the first time) or a driver has had gaps or lapses in
coverage, then insurance companies tend to charge higher premiums to these
drivers. Insurance companies prefer to see that a driver has had continuous
coverage. Some insurers presume that if you’ve been licensed, but you did not
have insurance, then you were likely breaking the law by driving without
insurance.

18. Claims record

Yes, your claims record is a big factor that affects car insurance rates in Michigan. If you have a history of filing claims against auto insurance companies, then the car insurance companies from whom you are seeking coverage are going to charge you higher premiums. Why? Because insurance companies will expect that you will file claims against them – if given the chance – and thereby require them to payout on those claims.

When looking at a person’s claim history or claims record, insurers
not only look to claims filed by the person, but also to claims filed against
the person, whether the claims in question were at-fault or non-at-fault, the
number of claims and whether payouts were made on any of the claims (and the
amount of any such payouts).

19. Insurance coverage levels

This should not come as a surprise to drivers that the more they seek in terms of auto insurance coverage, the more they will have to pay in premiums. If insurers face having to pay more in the event that a crash occurs and a claim is filed, then they are going to want to collect more up front.

20. Insurance deductible levels

Insurance deductible levels is a factor that affects car insurance rates in Michigan because higher deductibles means lower premiums and lower deductibles mean higher premiums. When a driver opts for a higher deductible, that means that the insurance company will not have to start paying on a claim until the deductible is paid. This saves the insurer money.

On the other hand, if a driver has a low or zero deductible, then the
driver needs to pay little or nothing upfront and out-of-pocket to trigger the
insurer’s obligation to start paying on a claim. This costs the insurer money.

21. Discount options

Many auto insurers offer discounts on auto insurance premiums for
reasons that have absolutely nothing to do with your driving and whether you’re
a safe driver. For instance, depending on the auto insurer, some will offer
discounts based on:

Whether you purchase other types of insurance, such as homeowner’s coverage, from the insurer
Whether you are insuring multiple vehicles with the insurer
Whether you belong to certain organizations or associations or clubs or groups
Whether you are a student and you’re getting good grades
Whether you are driving an eco-friendly vehicle

22. Who is your insurance company?

Although this factor is last on this list, in reality, it is likely the most important factor that affects car insurance rates in Michigan.

Finding The Right Auto Insurance Company

Now that you know the top 22 factors that affect car insurance rates in Michigan, it is essential that you find the best auto insurance company to protect you, your family, your vehicle and your property.

To help you make that determination, please order your FREE copy of our book, “Attorneys’ Guide to the Best Auto Insurance Companies And The Ones Our Attorneys Recommend That You Should Avoid.”

Have questions about the 22 factors that affect car insurance rates and have questions about your car crash injury claim? Call the attorneys at Michigan Auto Law for a free consultation!

If you have questions about the 22 factors that affect car insurance rates in Michigan and need help with your crash injury claim, call now (800) 968-1001 for a free consultation with an experienced auto accident lawyer. There is no cost or obligation. You can also visit our contact page or use the chat feature on our website.

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