Michigan car insurance rates could drop but it's complicated - here's what you need to do

On July 2, insurance relief is finally coming to Michigan drivers after a new state law goes into effect to lower monthly auto insurance premiums.

Detroit has the highest rates in the state and Mayor Mike Duggan will help drivers understand the process during a stream Thursday night. Mobile app users can watch it on our Facebook page HERE or see it below.

The short explanation is you can save money on your car insurance. That's because Michigan is getting a break in those rates.

"We are going to recommend the best Michigan no-fault there is, and that's unlimited lifetime medical coverage," said State Farm Agent David Arce.

While you might not want or need unlimited medical coverage, no-fault means that if you get into a car accident, your own no-fault insurance will pay your medical bills. 

And you might not want- or need -unlimited medical coverage. No-fault insurance means that if you get into a car accident your own no-fault insurance will pay your medical bills.  

There are six options now for buying no-fault car insurance:

  • Unlimited medical coverage - where all of your medical bills will be paid. 
  • The next level down would pay up to $500,000 in medical bills
  • Down from there is $250,000 in medical bills
  • If you have medical insurance 
  • Employer pays medical - if you have health insurance through work, it will pay for your care
  • Medicaid pays medical - if you're on Medicaid, that will cover your care
  • Medicare - if you're over 65 and on Medicare, that will cover your bills.

"If you want to save the biggest bang for the buck, that's opting out of medical with your car insurance - iff you have qualified coverage somewhere else. That could be with your employer, that could be with Medicaid, or they could be with Medicare," Arce said. "If you don't want any premium surprises, you need to talk to your agent."

If you don't do anything by July 22, your insurance will automatically reset to the most expensive rate of unlimited medical coverage. 

The savings could be tremendous. For example, for an average driver in Detroit, the cost is $1,557 for unlimited medical insurance for six months. If you instead opt for the employer plan, rates could drop to $497 for six months.

No-fault insurance, which covers more than just medical bills, is tricky. The best thing is to see your agent before July 2.