Detroit has the most expensive car insurance in the U.S.

Shea Huffman Sep 11, 2014

Detroit has the most expensive car insurance in the U.S.

Shea Huffman Sep 11, 2014

Drivers in Detroit, Michigan, pay the highest auto insurance rates in the country, with annual premiums costing 165 percent more than the national average, according to a new study by InsuranceQuotes.com.

The study claims Michigan’s unique regulations on how insurers cover medical expenses are the cause for the state’s higher rates.

From the study:

The reason for this is quite simple, says Lori Conarton, communications director for the Insurance Institute of Michigan.

According to Conarton, Michigan is a no-fault auto insurance state, which means each insurance company compensates its own policyholders for the cost of injuries regardless of who’s at fault in the accident. This benefit is known as personal injury protection (PIP).

What’s wholly unique about Michigan, however, is that state law provides unlimited lifetime coverage for medical expenses resulting from auto accidents, making insurance very expensive.

“No other state in the country provides lifetime medical benefits, which means the cost of medical treatment plays a big role in what people pay for auto insurance in Michigan,” Conarton says.

Other factors that could contribute to Detroit’s higher premiums include the large number of uninsured drivers in the region, with 20 percent of drivers lacking car insurance in the state of Michigan, and 60 percent of drivers in Detroit driving without insurance, according to estimates from a different study earlier this year by Quadrant Information Services.

The study also looked at car insurance rates that were significantly higher or lower than the national average in other metropolitan regions throughout the country, including New York, Miami and Los Angeles, which all had higher-than-average premiums.

On the opposite end of the spectrum, Charlotte, North Carolina, and Cleveland, Ohio, have the lowest insurance premiums in the country, compared to the national average.

Data table courtesy of InsuranceQuotes.com.

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