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 Bankrate.com, 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