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One of the most expensive states for car insurance is Michigan, due in part to its mandatory personal injury protection and medical payments coverage, as well as a growing rate of claim fraud. Like most U.S. states, it is illegal to drive uninsured in Michigan and renewing your vehicle’s registration requires you to be insured. Because of this, short-term policies such as Michigan’s now-banned 7-day car insurance became popular among some drivers.
7-day car insurance was offered in Michigan and only kept motorists covered for a week before needing to be renewed. Although these policies are no longer available, knowing how they worked and what alternatives exist can help you decide which types of car insurance are right for you.
What was 7-day car insurance?
The cost of auto insurance in Michigan is higher than the average cost of auto coverage in the United States. 7-day car insurance was exclusively sold by LA Insurance in Michigan and was meant to keep motorists temporarily covered while they shopped for affordable, long-term insurance. The coverage lasted only a week and automatically lapsed if not renewed. 7-day insurance was more expensive than regular car insurance, but proved to be convenient for some Michigan drivers.
Many Michigan drivers purchased this policy only to satisfy vehicle registration requirements and let it lapse after seven days, despite the penalties involved. As this allowed many motorists to abuse the policy and maintain their car registration while not having to pay for insurance, a settlement was eventually reached that prohibited LA Insurance from selling any more of these policies.
Enough Michigan drivers misused the 7-day insurance policy that the government was compelled to outlaw the program. LA Insurance now sells a 6-month policy that will expire after 13 days if no payment is made, and functions in a similar fashion to the now-outlawed 7-day insurance.
Alternatives to 7-day insurance
Although 7-day car insurance is no longer available to drivers in Michigan, there are several other options for coverage that may be more affordable or convenient than standard coverage. Here are a few of your options:
Short-term car insurance
These can be either six- or 12-month policies, but you are allowed to cancel at any time if you find a better rate elsewhere. However, you might be charged a cancellation fee. Still, the fees associated are usually much lower than what you would have paid for 7-day insurance.
You may be able to incur significantly lower insurance rates by being charged for only the miles you drive. With a usage-based policy, you can also cancel or pause your coverage if you will not be using your vehicle for a long period of time.
Minimum liability insurance
Since driving without insurance is illegal in Michigan, many drivers opt to purchase only the minimum required coverage. Michigan has a mandatory minimum coverage of 50/100/10 and costs $995 annually on average. However, drivers are encouraged to purchase coverage in excess of the required minimum coverage limits. Minimum limits may not cover the full expenses incurred as a result of an at-fault accident.
Frequently asked questions
Can I still buy 7-day car insurance in Michigan?
Because these policies were banned, 7-day insurance is no longer available to Michigan drivers. However, the insurance carrier LA Insurance — which initially provided the 7-day policies to motorists — has now replaced them with 6-month policies, which may expire after 13 days if not renewed.
There are several great auto insurance providers to consider when purchasing car insurance in Michigan. Other options for drivers looking for alternate forms of coverage include short-term car insurance and usage-based insurance.
Where can I buy short-term coverage?
Short-term car insurance can often be found in six-month policy terms. These policies tend to be more expensive than long-term car insurance so you may have to do some digging to find a premium to fit your budget. However, six-month policies are offered by auto insurance providers in Michigan, including Geico and USAA.
What are the benefits of short-term coverage?
Shorter insurance policies can come in handy during times when you want to stay protected financially, but do not need the coverage for an extended period of time. For example, many students come home during breaks from school and drive different family members’ cars. To make sure they are properly covered, a short-term or temporary car insurance policy can be beneficial. Other instances can include driving on vacation or car rentals. Be sure to talk to an agent about your specific insurance needs.