Michigan is typically one of the most expensive states for car insurance. However, just because Great Lake State drivers tend to pay more doesn’t mean you can’t find affordable coverage. Bankrate’s insurance editorial team is here with strategies that might save you money on your next car insurance policy. We’ll also explain the state’s insurance requirements so you can make an informed decision when shopping for low-income car insurance.

Low-income auto insurance in Michigan

With average car insurance rates on the rise, finding cheap car insurance in Michigan is likely a top priority 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.

At $2,963 per year for full coverage and $999 per year for minimum coverage, average car insurance premiums in Michigan are much higher than in many other states. This is at least in part because the state has robust minimum car insurance requirements, including 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 for 2023-24 and drivers with lower PIP coverage levels will be charged $48 per year.

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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 (for damage from in-state accidents)
  • Personal injury protection in one of six amounts

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?

Michigan drivers pay an average rate of $2,963 for full coverage, while state-mandated minimum coverage is available for an average cost of $999. This is considerably above the national averages, which are $2,314 for full and $644 for minimum coverage.

One strategy that may help you save money when you are looking for low-income auto insurance in Michigan is shopping around. Ask several companies for quotes to see which gives you the lowest rate. You may be surprised at the range of rates you receive. This is because every insurer has their own proprietary algorithms that weigh personal rating factors differently. When asking for quotes, make sure you are requesting the same type and levels of coverage from each, so you can do a true comparison.

Below you can see average car insurance rates from some of the largest insurers in Michigan. Keep in mind that your rates will vary based on your location, vehicle type, age and more, but carriers in Michigan are not allowed to consider your gender, marital status or credit history when rating your policy.

  • Car insurance company Average annual premium for minimum coverage in Michigan
    USAA $464
    Chubb $783
    Auto-Owners $476
    Geico $590
    Donegal $760
    Pioneer State $508
    Progressive $943
    Hastings Mutual $643
    Farmers $707
    State Farm $2,322

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

One of the most important factors that insurers use to determine your premium is your driving history. A person with a clean driving record is likely to earn a lower rate than someone with multiple marks on their license. If you fall in the latter category, it may be helpful to take a defensive driving course, which can improve your skills behind the wheel and may also earn you a discount. If you have a record for safe driving, consider participating in your insurer’s telematics program, if it has one.

Military discount

Some insurers offer discounts to current and former military members. Family members may also be eligible. Additional discounts may be available for military-related factors that reduce your claim risk, like garaging a vehicle on base.

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 discount

Bundling your insurance, like home and auto, or insuring multiple vehicles with the same carrier results in a large discount with most carriers. If you’re considering switching carriers, exploring bundling options may be a worthwhile exercise.

Student discounts

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.

Senior discounts

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

  • No single company always has the cheapest rates for everyone, all the time. If you are looking for affordable coverage, your best tactic may be to compare quotes from companies that have a reputation for writing inexpensive car insurance. Be sure to take all possible discounts into consideration. Most companies offer at least a handful of these, and they can save you a significant amount of money. For example, with some insurers, agreeing to participate in a telematics program can save you up to 40 percent on your policy. Possibly the best way to save on your low-income auto insurance, however, is to maintain a clean and safe driving record.
  • 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.
  • There are a few tactics you can use to get the cheapest possible low-income car insurance in Michigan. In addition to comparing quotes and discounts, you can also improve your driving skills and avoid tickets and accidents. Check your policy details and make sure you’re not paying for endorsements you don’t need. While it may be tempting to reduce your coverage limits or increase your deductibles to save money, keep in mind that you could be responsible for hefty out-of-pocket costs if you cause an accident with insufficient coverage or a high deductible.
  • While there is not a single best car insurance company for everyone, you can find the best car insurance for you by considering your insurance needs and what you value from a provider. For example, if you have a limited income, you may want to search for a company that offers you the cheapest rates. If you have prior incidents on your record, you might look for a company writing affordable policies for high-risk drivers or if you’re tech-savvy, you might want a provider who offers a telematics program.


Bankrate utilizes Quadrant Information Services to analyze April 2024 rates for all 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 single, 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 2022 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.