Why your no-fault auto insurance rates are so high

21 percent of drivers in Michigan are uninsured.

MICHIGAN - Michigan has the highest auto insurance rates and some blame the state's no-fault law. Experts say there are several factors that go into determining that yearly premium.

According to Insure.com, Michigan has the highest average rates at $2,394. Meantime the national average premium is $1,318.

Spokesperson Michelle Megna says the biggest reason is undoubtedly no-fault insurance and the factors that play into it. Michigan is the only state that requires drivers to pay for unlimited lifetime medical care for people catastrophically injured in an auto accident. There is also a high rate of uninsured drivers. Michigan is at 21 percent, while states like Maine are 4.7 percent.

“And so, what happens is the risk or the cost will be spread out among more drivers," explained Megna. "In Michigan, it’s shared by a smaller group of drivers”.

Fraud is also a problem. “When people inflate car insurance claims, for example, if you get into an accident, to get a higher payout, you can inflate injuries," she continued. "You might have a $1,000 claim that now costs $7,000."

Lawmakers have also pointed out that Michigan doesn’t have fee schedules for medical providers. That leads to higher priced medical procedures for auto injury cases. There are several proposals on the table to reform the no fault law.

A few other factors, according to Megna, is type of vehicle, driving record, gender and credit history. She says each insurance company calculates premiums differently, so it’s important to shop around for the best rates.

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