Roughly 20% of Michigan drivers are uninsured, above the national average. (Credit: Vitos/Adobe Stock)
A new bill in the Michigan legislature would require insurance carriers in the state to offer a 10% discount on auto insurance premiums.
SB 328 mandates premium reductions of at least 10% without a reduction in benefits. The discount would apply to new policies and the first renewal of existing policies following the bill's passage.
“Car insurance rates in Michigan are too high,” said state Sen. Jeff Irwin in a statement. “Insurance company profits are soaring, along with our costs as consumers. It’s time for the legislature to stand up to these unjustifiably high car insurance rates,”
According to Bankrate, the average full-coverage insurance policy in Michigan cost $3,131 in 2024, $493 above the national average. Michigan also has a high level of uninsured motorists — about one in five drivers go without insurance compared to one in seven nationally, according to the Insurance Research Council (IRC).
But the American Property Casualty Insurance Association (APCIA) has spoken out against the bill, calling it “detached from the reality of the current market in Michigan.”
“Ultimately, SB 328 will destabilize Michigan’s auto insurance market, upset the consumer savings generated by the 2019 reforms and potentially deprive Michigan consumers of the insurance they need,” said Joe Roth, APCIA assistant vice president for state government relations.
APCIA cited a recent study from the IRC that found the 2019 forms had improved auto insurance affordability for Michigan drivers. The study found that, prior to the reforms, Michigan drivers spent 2.4% of their income on car insurance. In 2022, drivers were spending a lower amount: 1.9%. However, the Bankrate study found Michigan drivers were spending an average of 4.53% of their income on auto insurance in 2024.
A second bill introduced by Irwin, SB 329, would also impact auto insurers by banning them from charging a reinstatement fee or a higher rate if a driver had a previous lapse in coverage.
“People shouldn’t be penalized for having a lapse in coverage because they are sick or otherwise unable to drive,” Irwin said in a statement. “For people coming back into the market for car insurance, we need to make it easier, not harder, for them to pay into the system.”
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