Low-income car insurance in Michigan

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Car insurance is not cheap in Michigan. Dense traffic, a high rate of road accidents, instances of insurance fraud and theft have made Michigan the second most expensive state for auto insurance in the whole country. The average cost for car insurance across the U.S. is $565 for minimum coverage and $1,674 for full coverage. On average, licensed drivers in Michigan pay $2,309 for full coverage and $948 for minimum coverage car insurance mandated by law.

For low-income drivers, even the most basic coverage can be a financial strain. To ensure these drivers do not forgo insurance and invite trouble, the government has various programs for low-cost car insurance. In most cases, they offer only barebones coverage but enough to keep drivers on the road.

Low-income car insurance in Michigan

Part of why car insurance is exorbitant in Michigan is the amount of personal injury protection (PIP) coverage that every motorist is required to carry. Until recently, this amount was $500,000, the highest in the country and a factor that significantly affected insurance premiums. Michigan ranks fourth in the number of uninsured drivers, with over 20 percent of the state’s motorists forgoing auto insurance.

Although there is no low-income car insurance program in Michigan, recent changes to the law show promise of lowering insurance costs. As of July 2020, the mandatory PIP coverage is no longer $500,000. Instead, drivers need to fill out a form choosing one of the six types of PIP coverage, with the choice to opt-out of PIP insurance altogether if they have sufficient health insurance coverage.

The reformed law also prohibits determining the cost of insurance premiums based on non-driving factors such as gender, credit score and income, which should help low-income drivers get affordable car insurance. Taking some time to shop around and compare insurance providers can also help low-income drivers find cheaper car insurance.

Michigan requirements for minimum car insurance

To register your car and be legally allowed to drive anywhere in Michigan, you must have the minimum required car insurance coverage. Michigan is a no-fault state, which means that the insurance provider must pay regardless of who was responsible for an accident. PIP insurance has been mandatory until recently because it helps pay for medical expenses and lost wages. The minimum car insurance requirements in Michigan are 50/100/10, which includes:

  • $50,000 bodily injury liability coverage per person
  • $100,000 bodily injury liability coverage per accident
  • $10,000 property damage liability coverage per accident

While minimum coverage may be financially appealing and provide enough coverage to get you on the road, it will not offer much protection for you or your vehicle. If your car is expensive, financed, or in a region with high instances of theft, severe weather or uninsured motorists, you should consider adding collision and comprehensive coverages to your policy for better protection. Below are some average rates for minimum coverage from various car insurance providers in Michigan.

Average Michigan car insurance rates by company

Car insurance company Average annual premium for minimum coverage
AAA $893
Allstate $1,301
Auto-Owners $827
Chubb $363
Donegal $606
Farmers $2,237
Frankenmuth $632
Geico $724
Grange $1,749
Hastings Mutual $843
MetLife $532
Pioneer State $927
Progressive $683
Secura $115
State Farm $2,103
The Hanover $1,511

Secura offers the lowest minimum coverage rates in Michigan at around just $113 a year, a rate that’s hard to match. The company has been in business for over a century, is backed by an AM Best rating of A, and offers both basic and additional coverages for drivers in need of affordable car insurance.

If you’re willing to spend a little more, Chubb costs about $363 a year for minimum coverage, and policyholders get the benefit of superior customer service, a direct and personalized relationship with the insurer and the option for valuable coverages like rental car reimbursement, worldwide rental car coverage, and original equipment manufacturer parts coverage.

MetLife places third in terms of lower premiums at around $532 a year. This provider offers fewer discounts but includes perks like new car and major parts replacement coverages, GAP insurance and identity protection with every policy.

While these rates should give you a good starting point as you search for car insurance, minimum coverage rates vary widely by the provider in Michigan. They will also be based on individual factors, such as your car’s make, model and condition. It’s probably a good idea to shop around and speak with a licensed insurance agent to learn more about how to get the best financial protection for your unique circumstances at the lowest price.

Car insurance discounts for low-income drivers

Regardless of your income, most insurance providers offer discounts to help lower your insurance premiums, sometimes as much as 40 percent. Some insurers offer unique discounts, but the most common ones are available from most insurance companies.

Bundling discount

If you purchase two or more policies from the same insurer, you usually have the option to bundle them and pay a single premium, which can mean up to 25 percent in savings.

Safety discount

Safe driving earns significant discounts from most insurers, and a clean driving record, good road habits and a vehicle equipped with the most advanced safety features will usually get you lower premiums. Many insurers also offer telematics programs too, which means if you agree to let them monitor your driving through an app or other device, you can save money for driving carefully.

Loyalty discount

When you’re a customer for five years or more, most providers reward you with a loyalty discount. Depending upon the insurer, this discount can grow over time.

Other popular discounts include savings for good students, military or affinity group members, having low annual mileage and being claims-free for several years. As you shop around and compare providers, it’s a good idea to check out their websites or call an agent to determine all the various discounts available to you before purchasing to ensure you are getting the best possible rates.

Frequently asked questions

What company offers the cheapest car insurance?

Insurance is state-regulated, and rates vary from one place to another. Some providers have established a reputation for being the cheapest car insurance companies by offering optimal coverage at affordable prices, but actual rates will differ from person to person. Collecting quotes from multiple companies and comparing pricing and coverage is ideal for finding the best deal. It’s also a good idea to speak with a licensed insurance agent to maximize your savings and still get the best protection possible.

Where can I find low-income car insurance?

California, New Jersey and Hawaii have state-sponsored car insurance programs for low-income drivers. People in Michigan, Hawaii, Massachusetts and Washington might be able to find cheaper car insurance by taking advantage of available discounts, as these states do not allow credit to be considered as a factor in calculating premiums. In other states, you might consider looking for a provider that specializes in poor credit.

What does low-income insurance cover?

State-sponsored car insurance provides limited coverage without the option of add-ons. In most cases, only the basic liability and property damage coverage is offered, which allows you to drive legally but will likely not be sufficient to protect you and your vehicle fully.


Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes, and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and minimum coverage limits.

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2018 Honda Accord, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.

Rates are determined based on 2021 Quadrant Information Services data.

Written by
Cynthia Widmayer
Insurance Contributor
Cynthia Widmayer has over two years of experience as a personal finance writer. She covers home, car and life insurance products for Bankrate, the Simple Dollar, and Coverage.com, among others.
Edited by
Insurance Editor