Michigan is one of the more expensive states for car insurance, with local average rates well above the national average. Full coverage auto insurance in Michigan costs an annual average of $2,345, while minimum coverage in the area has a yearly average of $946. For comparison, the national annual average rates for full coverage are $1,771 and $545, respectively. The higher costs of auto insurance in the area could make it more challenging for someone who makes a lower income to find the coverage they want and need. Bankrate’s insurance experts have taken a look at some options that might be attractive to low-income Michigan drivers. We’ve also compiled some tips and information that might help you save even more on your car insurance.


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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.

Part of the reason for Michigan’s high insurance costs is the percentage of uninsured motorists in the state. In 2019, over 25% of Michigan drivers were estimated to be uninsured, according to the Insurance Information Institute (Triple-I). Uninsured drivers may be more likely to leave the scene of an accident, creating a hit-and-run scenario, which could mean your insurance policy would have to cover the cost of damages or injuries.

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 may have contributed to the high cost of coverage in the state. Now, drivers can choose from six levels of PIP, which could help low-income drivers have more control over their premiums.

While minimum coverage may be financially appealing based on initial out-of-pocket savings and will provide enough coverage for you to legally drive, it does not offer much protection for your finances in the long term. Accidents can quickly add up in medical expenses or cost to repair damages, 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 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 damages.

Average Michigan car insurance rates by company

If you’re shopping for low-income car insurance in Michigan, getting quotes from several companies to compare the rates will help you 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.

Car insurance company Average annual premium for minimum coverage in Michigan
USAA $294
Chubb $376
Auto-Owners $490
AAA $501
Geico $552
Donegal $647
Pioneer State $700
Frankenmuth $797
Progressive $818
Hastings Mutual $880
Farmers $1,483
The Hanover $1,931
State Farm $1,944
Grange $1,954

It’s easy to see why shopping around can be helpful; rates from these companies vary as much as thousands of dollars a year. USAA and Chubb offer the lowest average minimum coverage rates in Michigan, based on the carriers we assessed. For the same level of coverage, Grange’s average rate is a whopping $1,954 per year. 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 these rates 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, driving history, and the coverage types and levels 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 discounts for low-income drivers

Taking advantage of car insurance discounts can be one of the easiest ways to lower your premium. Most major companies offer at least a few discounts, some of which can lower your premium significantly.

Bundling discount

Bundling your insurance means buying two or more products from the same insurance company, which may translate to savings on both policies. The most common bundles are home and auto bundles, but you may also save for bundling your auto insurance with a renters or condo policy, or even for purchasing boat, pet or life insurance from the same company as your auto insurance.

Safety discount

Safe driving can earn significant discounts from many insurers. A clean driving record, good road habits and a vehicle equipped with advanced safety features will often earn you cheaper premiums. Many insurers also offer telematics programs for even more savings. If you agree to have your driving monitored through an app or other device, you may save money for driving carefully.

Student discounts

Car insurance for teen drivers is generally quite expensive. If you have a teen on your policy and live in Michigan, your rates could be quite high. Thankfully, many companies offer ways for younger drivers to save. Good student discounts, driver training discounts and distant student discounts could all help you lower your premium.

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 is 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.
    • Michigan does not have a state-sponsored low-income car insurance program. However, you may be able to find cheaper rates and gain more control over your premium by shopping around, knowing what coverage types and limits are appropriate for your needs, taking advantage of discounts and maintaining a clean driving record.
    • The coverage on your policy will depend on coverage types and limits you purchase. State minimum and liability-only coverage will provide coverage for the damages and injuries you cause to another person in an at-fault accident, and your own injuries regardless of who is at fault. How much coverage you have depends on the limits you select. If you choose full coverage, you also gain coverage for damage to your vehicle, regardless of fault.


Bankrate utilizes Quadrant Information Services to analyze 2022 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 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 2020 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.