Car insurance in Detroit is expensive, lags Miami, Tampa

Metro Detroit has the third-most-expensive car insurance in the country, according to a new report.

Only Miami and Tampa residents spend more of their income on premiums than in metro Detroit, where residents pay $3,067 each year, according to the report from, which looked at the 25 largest metro areas in the country, by population.

Michigan’s the seventh most-expensive state for car insurance, with an average annual premium cost of $2,691.

Miami residents pay $3,447 a year and in Tampa, car insurance costs $3,302 annually, according to the report. With average premiums of $3,139 annually, New York is the most expensive state for car insurance, the report said.

The high insurance premiums in metro Detroit mean residents spend nearly 5 percent of their household income on car insurance. The national average is $2,014 a year, nearly 3 percent of the average U.S. income and almost 14 percent higher than a year ago. Bankrate data shows metro Detroit costs are 6.79 percent higher than they were in 2022.

High auto insurance rates were part of the impetus behind a rework of Michigan’s no-fault insurance law in 2019.

The higher costs are due to inflation, labor shortages and supply chain disruption, Cate Deventer, a Bankrate analyst, said in a statement. She said individually, the factors increase the costs of claims and when combined, they significantly drive up the cost to repair or replace a vehicle.

And the costs can be even higher depending on circumstances. Causing a car accident increases metro Detroit car insurance premiums to $4,270 a year; a married couple who adds a 16-year-old driver will see rates rise to $6,455 a year and a drop in credit will lead to a jump in costs to $8,056 a year, according to Bankrate’s report.

In metro Detroit, a drop in credit from good to poor or a DUI conviction can be especially expensive: both carried the stiffest cost penalties of anywhere else in the country. While the added average cost of a drop in credit is $1,465 nationally, it’s $4,989 in metro Detroit. And a DUI on average increases the cost of car insurance by $1,887; in metro Detroit, it’s a $4,035 hit.

Boston is the big city with the most affordable car insurance; the average of $1,328 area residents spend represents less than 1.5 percent of their salaries. The most affordable state is Maine, where premiums run just $941 on average.

Deventer said in the statement that she expects insurance costs to continue to rise this year. The Bankrate data assumes a driver who owns a 2021 Toyota Camry and drives 12,000 miles a year, commuting five days a week.

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