Michigan drivers pay nation's highest auto insurance premiums

Report: Ohio drivers charged lowest premiums in the U.S.

2/25/2014

Gekkos, talking pigs, and Flo notwithstanding, your auto insurance rates depend a lot on whether you live north or south of the Ohio-Michigan border.

According to a new report by Insure.com, Ohio drivers pay the lowest premiums in the nation at $926 a year, while Michigan drivers are at the opposite end with the highest premiums of $2,551.

The figures are based on average car insurance rates from six large carriers for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of $100,000 for injury liability for one person, $300,000 for all injuries, and $50,000 for property damage in an accident. The hypothetical driver has a $500 deductible on collision and comprehensive coverage, a clean driving record, and good credit.

“When we get clients we do let them know that if they’re moving from Ohio to Michigan it’s going to cost them more. But that’s nothing new. It’s been that way for years,” said Ben Brown, vice president of Brooks Insurance Agency, which is licensed in both states.

Insure.com’s state rankings differ from those of the National Association of Insurance Commissioners, whose most recent (2011) rankings place Michigan eighth-highest at $945 and Ohio 42nd at $620.

Last year, Ohio ranked 45th in the Insure.com annual study while Michigan ranked third.

Michigan drivers pay higher premiums mainly because of the state’s personal injury protection benefits. Under the state’s no-fault insurance mandate, drivers must purchase personal injury protection as part of their coverage. The coverage pays not only for bodily harm but also for property damage, and in the case of bodily harm the medical benefits are uncapped lifetime benefits.

All other states with personal injury protection cap benefits, but in Michigan, auto insurance companies must pay the first $530,000 for treatment for someone hurt in a car accident. As healthcare costs rise, so do auto insurance premiums.

“We have higher premiums in Michigan but we also have higher benefits than other states,” said Lori Conarton, spokesman for the Insurance Institute of Michigan based in Lansing.

“But those same factors that are driving up your health insurance are driving up your auto insurance in Michigan. The insurance industry here in Michigan is supporting efforts to reduce the costs and lower customers’ premiums,” she added. Those efforts include pending legislation to cap personal injury protection payouts.

Ohio remains among the lowest-cost states for auto insurance because it is tightly regulated and also has thriving competition. More than 660 car insurers do business in Ohio, according to industry analyst A.M. Best. Only Illinois and Texas have more.

“As far as our ranking nationally, in general our homeowners and auto insurance rates have been in the lower levels for years and last year,” said Mary Bonelli, spokesman for the Ohio Insurance Institute. “I think the competition is a significant portion of it, but I also feel the regulatory environment here in Ohio encourages insurers to enter the state. That facilitates the competition and affordability.”

But Mr. Brown cautioned that auto insurance is just one aspect of living north or south of the border. Auto premiums are higher in Michigan, but property taxes are lower.

“Somebody has to really look at the big picture — the lower taxes [in Michigan] vs. the high auto insurance premiums. It’s about more than just being an Ohio State or Michigan fan,” he said.

As far as individual models, Jeep snagged seven of the top 20 spots on the list of vehicles that are the least expensive to insure.

The Toledo-built Jeep Wrangler Sport was the cheapest to insure among the 855 vehicles reviewed for the 2014 model year, with an average annual premium of $1,080. That compared with the most expensive vehicle — the Nissan GT-R Track Edition two-door coupe — with an average premium of $3,169.

Rates are affected by many factors, including repair costs, frequency of accidents, bodily injury claims, and incidence of theft.

The relatively low insurance rates for Jeeps reflect safe driving and low claims rates, the report found.

SUVs dominated the top 20 slots on the least expensive list because they are often a go-to vehicle for families.

Family vehicles generally have fewer crashes, perhaps because drivers are careful ferrying children.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.