Why Insurance Rates Are Going Up in 2026 (Michigan Edition)
If you’ve opened your renewal recently and noticed an increase, you’re not alone. Across Michigan — including areas like Sterling Heights — insurance rates are climbing for both auto and home policies. Even drivers with clean records and homeowners with no claims are seeing higher premiums.
This article explains why rates are rising, what’s driving the increases, and what you can do to lower your costs.
1. Auto Repair Costs Have Skyrocketed
Modern vehicles contain advanced technology, sensors, and safety systems that make even minor repairs extremely expensive. A small fender-bender that used to cost $1,200 may now cost $3,500–$6,000 due to:
- Advanced driver-assistance systems
- Bumper and radar sensors
- Calibration requirements
- More expensive parts
- Increased labor time
When repair and labor costs rise, insurance companies must adjust premiums to match the higher payouts.
2. Claim Severity Is Increasing
Insurance companies are not just paying more claims — they’re paying larger claims. This includes:
- Higher medical costs
- Record-level lawsuit settlements
- Rising replacement costs for totaled vehicles
- Payouts from distracted-driving accidents
Even if your personal driving record is spotless, the overall system affects everyone’s rates.
3. Michigan’s Catastrophic Claims Fee Changes
Michigan’s auto insurance reforms continue to shape the cost structure. Periodic adjustments to the MCCA fee impact every driver in the state.
Depending on your chosen PIP level, some drivers may see:
- Increased surcharges
- Higher medical claim costs
- System-wide rate recalculations
These adjustments ripple through every carrier’s pricing.
4. Severe Weather Is Causing More Home Insurance Claims
Michigan has experienced a rise in:
- Wind storms
- Hail events
- Freezing temperatures
- Water damage
- Roof and siding claims
These patterns increase losses for insurance carriers, and the result is higher homeowners insurance premiums across the state.
5. Inflation in Building Materials
Homeowners insurance rates especially reflect the cost of:
- Lumber
- Roofing materials
- Drywall and insulation
- Labor costs
- Replacement parts
If it costs more to rebuild a home, the insurance company must increase dwelling coverage and adjust the premium accordingly.
6. Lawsuit and Liability Costs Are Rising
Liability payouts are increasing nationwide due to:
- Larger settlements
- Higher attorney involvement
- Longer claim duration
This affects both auto and home policies. Even customers without claims see rate adjustments because the entire risk pool must absorb the increased liability costs.
7. Carriers Are Adjusting for Prior-Year Losses
Most carriers have reported negative underwriting results over the last several years. When claim costs outpace the premium collected, companies must file rate increases with the Department of Insurance.
This is why you’re seeing rate increases across:
- Major national carriers
- Regional carriers
- Local Michigan insurers
It’s a market-wide correction, not something tied to your specific record.
8. Fraud and Staged Accidents Still Impact Michigan Rates
Michigan continues to experience:
- Staged accidents
- Fraudulent medical billing
- Inflated claim submissions
Even though laws have improved, fraud still affects total claims paid — and therefore premiums.
9. Reinsurance Costs Are at an All-Time High
Reinsurance is insurance for insurance companies. It protects carriers from catastrophic losses. Reinsurance rates have soared, and those added costs filter down to consumers in the form of higher premiums.
How to Lower Your Insurance Costs in 2026
- Bundle auto and home policies: Combining policies usually saves 15–25%.
- Increase deductibles: A higher deductible can lower your premium significantly.
- Ask about telematics: Usage-based programs can save safe drivers money.
- Review coverage annually: Make sure you’re not paying for outdated or unnecessary options.
- Work with an independent agent: Independent agencies can shop multiple carriers to find the most competitive rates.
Conclusion
Insurance rates are rising due to economic factors, repair costs, severe weather, medical inflation, and statewide changes affecting the entire market. While these increases are frustrating, understanding why they happen helps you stay ahead of them.
If you want a personalized review of your auto or home insurance, Clear View Insurance can help you compare carriers and find the most competitive options available today.