|Flag of City of Grand Rapids (Photo credit: Wikipedia)|
So is it true, do people in Grand Rapids actually pay more than the rest of Michigan? Or the rest of the country for that matter?
No Fault’s Fault
With Michigan drivers required to carry no-fault insurance, there is some truth to the high price gripes. This requirement provides unlimited lifetime medical care for auto related injuries. Michigan is the only state that requires this, and thus the burden falls on all auto owners, artificially upping rates for Michigan drivers. Adding up the numbers from a report by carinsurancequotes.com shows that Michigan residents pay the largest amount of their annual income for car insurance, with 8 percent of the annual median household income going to pay for car insurance. OUCH! By comparison, the residents of Massachusetts pay only 1.4 percent of their household income.
So while there isn’t any hard research on whether or not Grand Rapids (please point it out if you can find it…I haven’t been able to), there may be some clues in typical geographic related cost issues. Such as:
- Urban vs. Rural. More traffic, more accidents, more crime all come with urban environments compared to rural (usually). So, if you live in Grand Rapids you’re in the second largest urban area in the state of Michigan. So, if you’re in the second largest urban area in the state with the highest car insurance rates in the country, it’s safe to assume this will count against you.
- Weather. Again, Grand Rapids being only a short jaunt away from Lake Michigan has another factor working against it. Getting pounded by heavy lake effect snow each year also causes more accidents and likely jacks up insurance rates.
So, while I don’t have hard evidence for you, when you combine in the factors of no fault insurance, the urban environment and the bad weather, car insurance in Grand Rapids is basically the “perfect storm” for high insurance rates, and likely does have some of the highest in Michigan.