Michigan policymakers overhauled the state’s auto insurance laws in 2019. Drivers were paying some of the highest premiums in the country and had for decades. Michigan’s “no-fault” insurance laws were the only in the country that required every driver to purchase unlimited personal injury coverage. Forcing everyone to buy uncapped insurance for medical expenses resulting from a car accident led to expensive mandatory premiums.

Lawmakers also passed a law in 2024 that required the Michigan Department of Insurance and Financial Services to study the impact of the 2019 reforms. The department just published the results, and they confirm that the changes lowered costs for Michigan drivers.

The 2019 reforms signed into law by Gov. Gretchen Whitmer gave drivers a choice of how much personal injury coverage to purchase. They could make no change and continue with an unlimited level or choose limits of $500,000 or $250,000. Motorists whose medical expenses are covered by a different insurance plan, such as their employer’s or Medicaid or Medicare, could choose an even lower limit ($50,000) or opt out of personal injury coverage entirely.

The report shows that the average annual auto insurance premium in Michigan decreased by $357 annually, [LJ1] or 19%, between 2019 and 2024. People who opted out of or chose limited coverage for personal injuries saved the most, but premiums decreased across the board. Even people who stuck with unlimited coverage saw their average premiums fall.

Limited coverage and opting out of personal injury coverage are increasingly popular options, growing by about 3%-5% annually, according to the report. Nearly 30% of the vehicles insured by drivers in Michigan had limited or no personal injury insurance in 2024.

The largest premium decreases occurred in areas of the state that were plagued with the highest average costs. In Wayne County, for instance, the average premium decreased by $539. Drivers over the age of 64, who already have medical coverage through Medicare, saved 22% on their annual premiums on average, larger than any other age group.

There was already some evidence of Michigan’s reforms lowering costs, but this report from the state’s insurance department is the most thorough and detailed analysis of the 2019 reforms. It is based on data provided directly by auto insurance companies and captures 92% of the private market in Michigan.

The report suggests the 2019 reforms also reduced the number of uninsured drivers in Michigan. While the percentage of uninsured drivers has increased slightly from pre-2019 levels, the analysis makes the case that Michigan’s uninsured rate is probably lower than it would have been without the reforms. The state’s rate used to be about 5%-6% higher than the national average, and it is now only about 4% above it. This relative decline is likely the result of the 2019 reforms.

This is just the latest piece of evidence that the Legislature’s auto insurance reforms in 2019 were a success. None of this should be surprising, because the thrust of those changes was to simply empower drivers to choose less expensive coverage. Michigan residents are increasingly making that choice, so the average premiums are declining. Injecting more consumer choice into the auto insurance market is a powerful tool to reduce costs.

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