Car Insurance in Michigan vs. Texas: Costs, Laws and Resources

Each state has its minimum requirements for auto insurance coverage. When moving from Michigan to Texas or vice versa, you need to know how their coverage requirements differ.

Michigan and Texas both include similar minimum requirements, like bodily injury liability per accident, but have different liability limits: Michigan has a $40,000 limit, whereas Texas has a $60,000 limit. Unlike Texas, Michigan also requires unlimited personal injury protection per accident and $1 million in property protection. Additionally, Texas requires property damage liability, which is not required by Michigan.

In this MoneyGeek review, we discuss the policies, requirements, and rates for auto insurance in Michigan vs. Texas so you can choose the right policy that is best suited to your budget and needs.

According to the car insurance laws in Michigan, you must have 20/40 in liability limits, PIP coverage of unlimited limits and property protection coverage of $1 million. In contrast, the car insurance laws in Texas require 30/60/25 in liability limits.

Since Michigan mandates more requirements than Texas, its minimum-coverage car insurance policy is more expensive. Drivers in Michigan pay an annual rate of $2,921, whereas drivers in Texas spend $665. In addition to a state's amount of minimum requirements, factors like population density and accident frequency may also affect insurance rates.

Because Michigan is a no-fault state, drivers use their own insurance providers to cover injuries and damages, regardless of who caused the accident. Medical bills are covered by no-fault insurance through PIP coverage.

Meanwhile, Texas is an at-fault state that uses a tort liability system. This system requires the at-fault driver to pay for all damages through their insurance provider.

We compared and analyzed the costs of several insurance companies in Michigan and Texas to help you find the most affordable car insurance policies. The results are listed below.

• Cheapest in Michigan: Nationwide ($774 per year)
• Cheapest in Texas: Farmers ($420 per year)

If you’re from Michigan and an eligible military member or a family, USAA is an even cheaper option averaging $704 per year for a minimum coverage policy.

Since every state has different coverage requirements, rates can vary even if a policy is from the same company. For example, Farmers offers its minimum coverage policy at $420 per year in Texas while it's $9,390 per year in Michigan.

Coverage is a significant factor that increases the cost of your premium. In Michigan, a full-coverage policy costs an average of $4,333 per year, while a minimum coverage policy costs roughly $2,921. A full-coverage policy in Texas costs $1,316 annually, whereas a minimum coverage policy costs around $665. Considering rates for both coverage amounts, Texas offers lower premiums.

Car insurance rates can vary by state for several reasons. Michigan’s status as a no-fault state and higher rate of uninsured drivers increases the cost of premiums in comparison to Texas.

Your location is another driving factor influencing your insurance premium. People are more densely packed in cities that have a high population, which could result in more accidents. As a result, premiums are higher in locations with high density. MoneyGeek found the cheapest and most expensive cities in Michigan for car insurance are Ann Arbor and Detroit, with policies costing an average of $1,083 and $3,688 per year, respectively. In Texas, the cheapest car insurance policies can be found in Abilene at $480 per year, while Houston offers the most expensive policies at $806 per year.

If you're considering relocating to Michigan from Texas or vice versa, state laws require that you transfer your driver's license and registration. You don't need to change your provider if you're happy with your current provider and your policy covers the requirements in your new state. However, your rate may change to meet the risk and coverage requirements in your area.

MoneyGeek provided resources to help you find the best company for your needs in your search for a new car insurance company.

State laws and car insurance prices vary from one state to another. MoneyGeek answered the following most frequently asked questions about car insurance in Michigan vs. Texas.

To calculate average car insurance rates by company and across Michigan and Texas, MoneyGeek collaborated with Quadrant Information Services to collect auto insurance quotes from both locations. We used a sample profile for a 40-year-old driver with a clean driving record and minimum coverage unless modified by criteria like coverage level, age, driving offenses and credit score. Learn more about how costs are calculated in our MoneyGeek car insurance methodology.

Minimum car insurance requirements by state were sourced from the Department of Motor Vehicles (DMV) of the respective state.