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Michigan drivers pay high premiums for car insurance compared to the national average, and if your finances are tight, you may have difficulty finding affordable coverage. Shopping around and qualifying for discounts are two ways you can lower your rate. There may be other options for low-income auto insurance in the Great Lake State, too. The state does offer assistance programs to help you afford your coverage when necessary.
Low-income auto insurance in Michigan
Finding cheap car insurance in Michigan is 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.
At $3,336 per year for full coverage and $1,191 per year for minimum coverage, average car insurance premiums in Michigan are much higher than 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.
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?
Michigan drivers pay an average rate of $3,336 for full coverage, while state-mandated minimum coverage is available for an average cost of $1,191. This is considerably above the national averages, which are $2,542 for full and $740 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 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 recent 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
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.
Bankrate utilizes Quadrant Information Services to analyze 2024 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 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.