The average cost of car insurance in Michigan is well above the national average, meaning maintaining insurance can become a financial struggle for some. Finding low income car insurance in Michigan is possible, but it requires shopping around and considering your options. In some cases, residents may be eligible for car assistance programs in Michigan to help lessen the burden of insurance costs. Bankrate can help you navigate the challenges of finding insurance that fits your budget by utilizing techniques to save money on your monthly premiums.
Low-income car insurance in Michigan
Finding cheap car insurance in Michigan may be one of the top priorities for low-income drivers. If your budget is already stretched, getting a lower rate could help free up your resources or give you a financial cushion.
The average cost of car insurance in Michigan is much higher than in the majority of the country, at least in part because the state’s minimum requirements for car insurance are much higher than in most other states and include personal injury protection (PIP) insurance, which we discuss in more detail in the next section.
Another factor that contributes to Michigan’s high car insurance rates is an increase in the catastrophic claims fees in the state, which cover medical expenses for the most severely injured victims of auto accidents. According to the Michigan Catastrophic Claims Association (MCCA), these fees are necessary due to a deficit in the MCCA’s statewide fund. As a result, drivers with unlimited PIP coverage will pay $122 per year under the new fee system and drivers with lower PIP coverage levels will be charged $48 per year.
Michigan requirements for minimum car insurance
To register your car and be legally allowed to drive in Michigan, you must have a car insurance policy with at least the minimum required coverage types and limits. The minimum car insurance requirements in Michigan are 50/100/10, which means:
- $50,000 bodily injury liability per person
- $100,000 bodily injury liability per accident
- $10,000 property damage liability per accident (for damage in other states)
- $1,000,000 property protection insurance (PPI)
Michigan is a no-fault state, which means that your insurance covers your medical expenses up to your policy’s limits following an accident, regardless of fault. Before July 2020, all Michigan drivers had to carry unlimited lifetime benefits for personal injury protection (PIP) coverage, which contributed to even higher costs for coverage in the state. Perhaps in a bid to make car insurance more accessible, the state has relaxed that requirement. Now, drivers can choose from six levels of PIP, which could help low-income drivers have more control over their premiums.
While minimum coverage car insurance will provide enough coverage for you to legally drive and may be appealing based on initial out-of-pocket savings, it does not offer much financial protection. The costs associated with a car accident can quickly add up, including medical expenses or repairs and having inadequate coverage may leave you responsible for covering the excess costs above your policy limits.
For this reason, most insurance professionals recommend that you purchase higher liability insurance limits if you can. If your car is leased or if you have a loan, you will likely need full coverage, which includes comprehensive and collision. Full coverage may be a good option even if you own your vehicle outright, especially if you don’t have the savings to pay for unexpected repairs or damage.
How much does low-income car insurance cost in Michigan?
The average rate for full coverage car insurance in Michigan is $2,691 per year, while the average for minimum coverage is $1,104. In contrast, the national average for full coverage is $2,014, and the average for minimum coverage is $622.
If you’re shopping for low-income auto insurance in Michigan, getting quotes from several companies to compare rates might be the best way to find the most affordable option for your situation. Bankrate has chosen to feature the minimum coverage rates from several Michigan companies here, as minimum coverage tends to be much cheaper than full coverage. However, you may want to consider higher liability limits or full coverage to better protect your finances.
Although rates can vary by a wide margin, make sure you ask for the same coverage types and levels on the quotes you request. Comparing car insurance quotes for varying coverage levels won’t give you a true indication of which company is the cheapest for you.
While the average rates we analyzed from Quadrant Information Services may give you a good starting point as you search for car insurance, your own rates will be based on individual factors, such as your car’s make and model, your driving history and the coverage types and policy limits you choose. It may be best to speak with a licensed insurance agent to learn more about getting the best financial protection for your unique circumstances at the lowest price.
Car insurance company Average annual premium for minimum coverage in Michigan USAA $350 Chubb $440 Auto-Owners $510 AAA $523 Geico $630 Donegal $917 Pioneer State $797 Frankenmuth $987 Progressive $903 Hastings Mutual $1,023 Farmers $1,623 The Hanover $2,314 State Farm $2,275 Grange $2,235
Car insurance discounts for low-income drivers
Taking advantage of car insurance discounts could be one of the easiest ways to lower your premium. Most major companies offer at least a few discounts, some of which could lower your premium significantly.
Good driver discount
You may be able to qualify for a better rate by maintaining a clean driving record in Michigan. This means having a clean driving record with no history of claims. Driving history is one of the most important factors in determining your insurance premium. You could also earn a discount if you participate in a telematics program to track your driving habits.
Some car insurance providers offer a discount for current and former members of the military. This might include discounts on car insurance for your military service, affiliations with certain military organizations and emergency deployment. You may find discounts available for active duty, retired military or for members of the National Guard or Army Reserves.
Anti-theft device discount
Having your car stolen or broken into can be costly for auto insurers if you have to file a claim. As a result, insurers may be willing to give you a discount if your car is equipped with an anti-theft device, such as a GPS tracker, vehicle recovery system, hidden kill switch or brake lock.
Bundling your insurance, or buying two or more insurance products, such as home and auto insurance, from the same insurance company, often nets you the biggest possible discount on your auto insurance.
Car insurance for young drivers is generally quite expensive. If you have a teen on your policy and live in Michigan, chances are you are looking to save. Good student discounts, driver training discounts and distant student discounts could all potentially help you lower your premium.
Some insurers may offer potential discounts for drivers over a certain age, such as 50 and over. However, these discounts may come with certain requirements, such as not having any operators under 25 and having no violations or accidents in the past three years. In addition, this discount may not be available in all states.
Frequently asked questions
Insurance rates vary among companies. Some providers have established a reputation for being among the cheapest car insurance companies by offering optimal coverage at affordable prices, but actual rates will differ for each driver. Collecting quotes from multiple companies and comparing pricing and coverage might be a good way to find the right coverage, company and rate. It’s also a good idea to speak with a licensed insurance agent to maximize your savings and still get the best financial protection possible.
Most insurance providers offer a number of car insurance discounts that you can utilize in order to lower your monthly premium. These discounts typically reward good driving or encourage you to bundle insurance products or pay in advance for a cheaper cost. In many cases, discounts can be stacked in order to maximize savings. Contact your insurance company to determine which discounts are available to you and how you can utilize them.
In 2020, Michigan passed a number of auto insurance law reforms that changed the state’s car insurance minimums and replaced the previous comprehensive no-fault personal injury protection coverage requirement with a tiered system. This new model allows drivers to purchase a lower coverage limit and pay less for their monthly premium than the previously mandated unlimited coverage requirement.
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.