Why Michigan Insurance Rates Have Skyrocketed Post-COVID-19—And What You Can Do About It

Michigan Insurance Costs Are Soaring—Here’s Why and How to Save

If you’ve noticed your insurance premiums climbing higher each year, you’re not alone. Since the COVID-19 pandemic, Michigan consumers have seen some of the steepest insurance rate increases in decades. From auto to homeowners to business insurance, costs have surged—leaving many policyholders frustrated and looking for answers.

So, what’s driving these increases? And more importantly, what can you do to keep your costs under control? Let’s break it down.

Why Have Insurance Rates Gone Up So Much?

Insurance rates don’t just rise arbitrarily—there are multiple factors at play, many of which have been exacerbated by the pandemic’s lasting effects. Here are some of the biggest reasons why your premiums keep increasing.

1. Inflation and Rising Repair Costs

Since 2020, inflation has impacted nearly every industry, and insurance is no exception. The cost of materials, labor, and replacement parts has surged, making repairs and claims more expensive for insurers. For example:

• The cost of vehicle repairs increased by 30% between 2020 and 2023, according to the Bureau of Labor Statistics.

• Homeowners insurance premiums jumped an average of 24% over the past two years, largely due to the rising cost of building materials (S&P Global Market Intelligence, 2025).

With higher claim costs, insurers have had no choice but to raise premiums to maintain financial stability.

2. More Severe Weather Events

Michigan has experienced an increase in severe weather events, leading to higher claims for home and auto insurance. From major snowstorms to record-breaking flooding, natural disasters are becoming more frequent and costly. In fact:

• The National Oceanic and Atmospheric Administration (NOAA) reports that 2023 saw a record number of billion-dollar weather disasters.

• Severe storms in the Midwest caused over $5 billion in insured losses in 2023 alone.

As claims payouts rise, insurers adjust premiums to reflect the growing risk of severe weather damage.

3. Increased Auto Insurance Claims and Accidents

During the early stages of the pandemic, fewer people were driving, which led to a temporary dip in auto insurance claims. However, post-pandemic, driving patterns changed significantly:

• More people are on the road, leading to increased accidents.

• Reckless driving, speeding, and distracted driving incidents have surged, pushing up claim frequencies and costs.

Michigan’s unique no-fault insurance system, which requires insurers to cover medical expenses regardless of fault, also plays a role in the state’s high auto insurance rates.

4. A Struggling Insurance Market

Many insurance companies are facing financial difficulties due to mounting claims and economic pressures. In response, some insurers have pulled out of certain markets or significantly raised rates. For example:

• Several major insurers stopped writing new homeowners policies in states with high climate risk, leading to reduced competition and higher rates.

• Michigan drivers pay some of the highest auto insurance rates in the nation, partially due to rising medical costs and fraud concerns.

With fewer options and increased risk, insurers price policies higher to mitigate financial losses.

What Can You Do to Manage Rising Insurance Costs?

While you may not have control over market conditions, you can take steps to keep your insurance costs as low as possible.

1. Shop Around for the Best Rates

Insurance rates vary widely between providers, so it pays to compare options. Many Michigan residents could save hundreds of dollars per year by switching carriers. Working with an independent insurance agency, like MS2 Agency LLC, allows you to compare multiple insurers and find the best coverage at the lowest price.

2. Bundle Your Policies

Most insurers offer discounts if you bundle multiple policies, such as homeowners and auto insurance. Bundling can save you 10-25% on your premiums, making it a smart financial move.

3. Improve Your Credit Score

Many insurers use credit scores to determine pricing. Maintaining a good credit score can lead to lower insurance rates. Paying bills on time and reducing debt can make a noticeable difference in your premiums.

4. Increase Your Deductible

Opting for a higher deductible can lower your monthly or annual insurance costs. Just make sure you have enough savings to cover the deductible in case of a claim.

5. Take Advantage of Discounts

Ask your insurer about available discounts, such as:

• Safe driver discounts

• Home security system discounts

• Good student discounts for young drivers

• Low-mileage auto discounts

6. Regularly Review Your Coverage

As your life circumstances change, so should your insurance coverage. Reviewing your policies annually can help you eliminate unnecessary coverages and ensure you’re not overpaying.

The Bottom Line

Michigan’s insurance rates have skyrocketed post-COVID-19 due to inflation, increased claims, severe weather, and insurer financial struggles. While these factors are largely out of your control, you can take proactive steps to reduce your premiums and find more affordable coverage.

Don't let rising insurance costs catch you off guard! Contact MS2 Agency LLC today for a free policy review and personalized recommendations to lower your premiums. Let us help you find the best coverage at the most competitive rates in Michigan. Call us now or request a quote online!

Sources:

• Bureau of Labor Statistics, "Consumer Price Index: Vehicle Repair Costs," 2024.

• S&P Global Market Intelligence, "Homeowners Insurance Rate Increases Analysis," 2025.

• National Oceanic and Atmospheric Administration (NOAA), "Billion-Dollar Weather Disasters Report," 2024.

• Insurance Information Institute, "Post-Pandemic Driving Trends and Insurance Impact," 2024.

🚀 Get Your Customized Insurance Quote Today!📝
Fast ⚡ Easy ✅ Tailored to Your Business Needs 💼

💼 Business Loans & Credit Lines 💳
🚀 Fast, Flexible, & Easy ✅ Competitive Rates 💰

⭐ See Why We're 5-Star Rated on Google!
Trusted by Businesses Like Yours ✅

💼 Ready to Save on Business Insurance? 🚀 Get Your Instant Quote Now—Fast, Easy, and No Hassle! Protect Your Business, Control Your Costs! 🔍

🚀 Get Up to $2M in Life Insurance – No Exam! ✅

Ethos offers up to $2M in life insurance from top carriers in about 10 minutes, with a 95% approval rate and no medical exam*.

*Just a few health and lifestyle questions

💳 Seamless & Secure Card Processing with Deposyt! 🚀 Low Fees, Fast Transactions, Maximum Security! 🔒

🚗 Out of Factory Warranty? No Worries! 🛡️ Arkay Auto Warranty Covers Repairs, Saves You Money, & Keeps You on the Road Longer! 🔧💰 Get Protected!