A consumer group says Michigan drivers paid a total of $2.5 billion more - a 40% hike - for car insurance since 2022, and rising insurance company profits are largely responsible.
$100 million of the premium increase was imposed between January and March of this year alone, according to a Consumer Federation of America analysis of new rates approved by the Michigan Department of Insurance and Financial Services.
Doug Heller, the group's Director of Insurance, said it's clear what's going on by just looking at two of the bigger companies, Progressive Insurance and Liberty Mutual.
Both companies reported profits more than doubled in the second quarter of 2025, compared to the same period last year. Progressive's year-to-date profit is $5.7 billion - despite spending a record amount on advertising - up from $3.8 billion last year.
Heller said car insurance companies have been claiming that higher costs associated with bad weather, tariffs, and health care are the reason people are paying more for insurance premiums. But the bigger reason, he said, is that car insurance companies are squeezing higher profits from those premiums, by reducing claim payouts, and increase premium prices.
"The insurance companies have been telling us to "look over there," while jacking up rates to fund their profits, and they're trying to blame everyone except themselves," he said.
Heller said the Michigan state legislature could do something about it, by requiring the Department of Insurance and Financial Services to look more closely at insurance companies' rate cases, among other reforms.
"We need to do a better job of overseeing these companies," Heller said. "Otherwise the big companies like Progressive report these incredible profits quarter after quarter and they spend this huge amount of money on their advertising campaigns, and then tell us that our rate hikes are simply a fact of life."
Progressive and Liberty Mutual did not respond to a request for comment.
Meanwhile, it appears that Michigan's 2019 no fault law has failed to restrain car insurance costs.
The law was supposed to cut rates by cutting benefits for full coverage for injuries sustained in car crashes, and allowing drivers to select lower levels of personal injury coverage.
The Insurance Alliance of Michigan insists the law is working. In an emailed statement, IAM Director Erin McDonough directed Michigan Public to her group's August 6th press release which falsely claimed that car insurance costs in Michigan are decreasing.
Later in the same statement, McDonough appeared to acknowledge that car insurance costs are rising.
"Auto insurance costs are increasing in every state because of tariffs, litigation and extreme weather – factors outside our control. However, the increase in costs would be much higher without Michigan’s reforms."
