Michigan car insurance rates up more than 7% in 2022 in wake of no-fault reform meant to lower rates
Michigan drivers are seeing an average 7.2% increase in their insurance rates in 2022, according to an analysis by the Consumer Federation of America of rate increases approved for 35 car insurance companies in the state.
The total increase so far is $498,977,294, with additional increases of about $68 million pending approval by the Department of Insurance and Financial Services, the insurance industry’s regulatory agency.
Doug Heller, who compiled the data, is Insurance Director for the consumer federation. He says the increases show that any rate reduction stemming from the 2019 auto no-fault law was temporary.
“It is staggering the amount of rate increases that Michigan drivers will be seeing on their bills over the next several months,” he said.
Heller said the increases are due to sleight-of-hand calculations under the 2019 auto no-fault law, which requires car insurance companies to reduce the personal injury protection (PIP) component of insurance policies by a certain amount. But rates on other parts of policies can go up.
Two companies did raise the PIP portion of their rates in 2022, although the rest kept it about the same, said Heller. But most companies also raised rates for two other portions of driver policies: bodily injury and comprehensive. Collision coverage rates also went up at most companies.
The result was total rate increases for most drivers.
“It’s meaningless for most of us to be told that a portion of our insurance bill went down, but overall we know are paying a higher rate,” he said. “We don’t pay six bills — we pay one, and that bill is going up.”
Heller said the 2019 auto no-fault law failed to look at the role of insurance company practices in driving up rates, so it’s no surprise, he said, to see drivers not realizing