Best Cheap Auto Insurance in Ann Arbor, Michigan (2023)

Home to the University of Michigan, Ann Arbor is also home to some pretty average rates for car insurance when compared to the rest of the state. If you live in Ann Arbor, you can expect to spend $345 per month for full-coverage auto insurance and $155 per month for liability-only coverage.

However, the rates you pay could be above or below those averages based on many factors, including your driving record. This guide will show you what to expect when purchasing your next car insurance policy in Ann Arbor.

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Best car insurance companies in Ann Arbor

The best car insurance company in Ann Arbor won’t be the same for every driver. That’s because every insurer uses different criteria to determine the rates it offers. Though insurers in Michigan can’t consider factors like your gender, marital status, ZIP code, and credit score in calculating your rates, insurers do take into account your age, driving history, and other qualities that will vary from one driver to the next.

This is why it’s important to compare quotes from multiple insurers to find the best rate for your needs. As you start your search, look at Chubb, Auto-Owners, and USAA. Each offers distinct benefits while also charging rates often below the Ann Arbor overall average of $250 per month.

Best insurer for luxury vehicles: Chubb

Best insurer for optional coverages: Auto-Owners

Best insurer for military members: USAA

Cheapest liability-only car insurance in Ann Arbor

If you cause an accident, liability-only car insurance pays to repair or replace the other party’s damaged vehicle and associated medical costs. This coverage goes above and beyond the personal injury protection included in the other party’s policy. If you damage your own car, however, your liability-only coverage won’t pay to repair or replace it.

Liability-only insurance is generally the least expensive coverage option, but it can leave you financially vulnerable because it doesn’t cover your expenses beyond personal injury protection.

Auto-Owners has the cheapest liability-only rates in Ann Arbor, averaging $55 per month. The following insurers also offer cheap liability-only car insurance in Ann Arbor.

Cheapest full-coverage car insurance in Ann Arbor

Drivers looking for more protection than liability-only coverage provides may want to purchase full-coverage car insurance. This kind of insurance generally includes collision coverage, which pays to repair or replace your vehicle if it’s damaged in an accident you caused. It also includes comprehensive coverage, which pays to repair or replace your vehicle if it’s damaged because of something other than an accident, such as weather, theft, or vandalism.

If you lease a vehicle or obtain a loan to purchase one, your insurer will generally require you to carry full-coverage insurance.

Car insurance requirements in Michigan

Michigan is a no-fault insurance state, which means your insurance pays to cover you through its personal injury protection clause, no matter who’s at fault in an accident. Your liability insurance will cover the other driver if their damages exceed their own personal injury protection coverage.

Under no-fault rules, drivers are required to carry the following types of coverage:

• 

  Personal injury protection (PIP)

  This coverage will pay for your medical bills and other associated costs (including loss of income) if you’re injured in a car accident, no matter who’s at fault.^[2] You can choose from multiple coverage levels for PIP insurance:

  • Unlimited coverage, which is the default option unless the insured driver chooses a different coverage level

  • Up to $500,000

  • Up to $250,000

  • Up to $50,000 for drivers who are enrolled in Medicaid

  • PIP medical opt-out, for drivers who have both Medicare Part A and Part B health insurance

• 

  Property protection insurance (PPI)

  This coverage pays for up to $1 million in damage your vehicle does to other peoples’ property while in the state of Michigan.

• 

  Residual bodily injury and property damage liability (BI/PD)

  This pays for damages, including your legal defense, if you hurt or kill someone in an accident. It also pays for property damage done to other peoples’ property while driving outside of Michigan. The BI/PD state minimum requirements are as follows:

  Coverage	Minimum Requirements
  Bodily injury liability	$50,000 per person and $100,000 per accident
  Property damage liability	$10,000 per accident (outside of Michigan)

Though these are the state minimum requirements for BI/PD coverage, Michigan has set the default coverage limits as follows:

• Up to $250,000 for a person hurt or killed in an accident

• Up to $500,000 for each accident if several people are hurt or killed

• Up to $10,000 for property damage in another state

Unless you specifically decrease or increase these amounts, any insurance policy you purchase in Michigan will come with these limits by default.^[3]

Michigan insurance laws

The current auto insurance requirements in Michigan took effect July 2, 2020. Prior to the new insurance laws, Michigan required all drivers to carry mandatory comprehensive lifetime no-fault personal injury protection. Under the new law, drivers have a tiered choice of PIP coverage.^[4]

Additionally, the new law also increased the minimum amount of coverage drivers must carry for bodily injury liability. Under the previous law, drivers had to carry a minimum of $20,000 per person and $40,000 per accident. The new law requires a minimum coverage of $50,000 per person and $100,000 per accident.

Cheapest car insurance for drivers with an incident

Having incidents on your driving record can affect your car insurance premiums. Whether you have a speeding ticket, an at-fault accident, a DUI, or another traffic citation on your record, your insurance company may consider you to be a higher-risk driver and raise your rates. In some cases, your insurer may even drop your coverage altogether.

In the sections that follow, you’ll see how individual incident types can affect the rate you pay for car insurance in different ways.

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Cheapest car insurance for drivers with a speeding ticket

Driving over the speed limit may be a common practice, but it’s still dangerous. The National Highway Traffic Safety Administration (NHTSA) found that 27% of Michigan traffic deaths in 2020 were speeding-related. That’s why even a single speeding ticket on your driving record can lead to higher insurance rates.

Ann Arbor drivers with speeding tickets pay $407 for full-coverage car insurance on average, compared to $345 for drivers with a clean record. If you have a speeding ticket, the following insurance companies offer the cheapest car insurance in Ann Arbor.

Cheapest car insurance for drivers with an at-fault accident

If you have an at-fault accident on your driving record, you may find it difficult to get cheap car insurance. This is because many insurers will consider you a higher risk after an accident and either raise your rates or drop your coverage, depending on the circumstances and severity of the accident.

At at-fault accident bumps full-coverage insurance to $411 per month for Ann Arbor drivers. If you’re in the market for new coverage, the following insurance companies have the cheapest rates for drivers with an at-fault accident in Ann Arbor.

Cheapest car insurance for drivers with a DUI

The state of Michigan imposes severe penalties on anyone caught driving under the influence. A first offense will result in six points on your license. Depending on the judge’s discretion, you may also face the possibility of a hefty fine, some jail time, community service, or a suspension of your driving privileges.^[5]

In addition to the state-level consequences, you can also expect to see your insurance rates go up significantly. Your insurer may also drop your coverage entirely. Drivers with a DUI conviction are considered a much higher risk, which means they’re less likely to be offered insurance coverage by standard insurance companies. Several insurance companies specialize in coverage for higher-risk drivers, but their rates will typically be much higher.

Drivers with a DUI in Ann Arbor have some of the highest overall insurance costs — $348 per month, on average. If you need car insurance after a DUI citation, the following insurers offer the cheapest car insurance in Ann Arbor for drivers in your situation.

Cheapest car insurance for seniors

Age is the only demographic factor that insurers in Michigan can still use to set your car insurance rates. In general, insurers charge the highest rates to young drivers, in part because of their lack of experience behind the wheel. Rates tend to go down for adults around age 35 and stay low for safe drivers.

However, once senior drivers reach their mid-70s, insurance rates tend to go up again. That’s because reaching age 75 often coincides with a slowing of reflexes and response times, which increases the risk of getting into an accident.

The average monthly cost of car insurance for senior drivers in Ann Arbor is $134 for liability-only coverage. Here, you can see the cheapest car insurance rates for seniors in Ann Arbor.

Cheapest car insurance for teens

Teenage drivers have the highest insurance rates of any age demographic. Their lack of experience on the road, paired with the higher likelihood that they’ll make risky decisions, means a higher chance of accidents.

That doesn’t mean teen drivers, and their parents, are stuck paying high premiums. Here are several strategies that can help lower car insurance costs for teens:

• Stay on your parents’ insurance. Although teens can potentially purchase their own auto insurance policy, it’ll almost always be cheaper and simpler for the young driver to stay on their parents’ policy.

• Choose a safe car to drive. Safe cars are less expensive to insure, and the Insurance Institute for Highway Safety (IIHS) has put together a list of safe, practical, and affordable vehicles suitable for teen drivers.

• Maintain a good GPA. Many insurers offer a good student discount to teen drivers who get good grades.

Teen drivers in Ann Arbor have an overall monthly cost of $330 for car insurance. The following insurance companies offer the cheapest policies for teen drivers in Ann Arbor.

How to get the cheapest car insurance in Ann Arbor

Car insurance companies in Michigan can no longer use your credit score, marital status, occupation, ZIP code, educational level, home ownership, or gender to set your premium rates. However, your driving history and age can still affect how much you pay for insurance.

Shopping around and comparing quotes remains an effective way to find the cheapest car insurance. You can also reduce your car insurance costs by:

• Maintaining a clean driving record: A driving record free of traffic violations, accidents, or other incidents is the most effective method of keeping low insurance costs.

• Bundling insurance policies: It’s common to get a discount when you purchase your homeowners or renters insurance from the same company insuring your automobile.

• Adjusting your coverage: Consider increasing your deductible, dropping collision or comprehensive coverage, or decreasing your liability amounts.

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Ann Arbor car insurance quotes by credit tier

As of July 2, 2020, insurers are now legally prohibited from using your credit score to set your auto insurance rates.

This makes Michigan one of only six states in the country that don’t allow insurers to use credit scores to set auto insurance premium rates. For the other 44 states, auto insurance companies may use your credit score to help determine your insurance rates, offering lower rates to drivers with good-to-excellent credit scores and higher rates to drivers with poor-to-fair credit scores.

Is car insurance more expensive in Ann Arbor?

The overall average cost of full-coverage insurance in Ann Arbor is $345 per month. This is significantly higher than the national average cost of $172 per month. However, Ann Arbor drivers save a little on liability-only policies, paying $155 per month for this coverage, compared to the national average of $106 per month.

Unfortunately, Michigan consistently ranks as one of the most expensive states for auto insurance. This is because of its no-fault insurance laws that require all drivers to carry personal injury protection, property protection, and residual bodily injury and property damage liability. Additionally, the high cost of living in Ann Arbor may also affect the cost of full-coverage auto insurance, since higher property costs generally increase the coverage needs for property protection.

More cities in Michigan

Ann Arbor’s car insurance prices are the median for the seven cities included in the Insurify Michigan insurance data. Southfield has the most expensive average full-coverage quote, at $380 per month, which is higher than Ann Arbor’s average of $345 per month. Lansing residents pay the least for full-coverage auto insurance, with an average quote of $303 per month.

Ann Arbor car insurance FAQs