Consumer Counselor
Insurance Information for Michigan Consumers
[FIS-PUB 0204] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]
Auto Insurance: Are You Eligible?
A Michigan insurance law called the Essential
Insurance Act guarantees that auto and home
insurance will be available to all eligible
Michigan citizens. The law says that you are
eligible for auto insurance if you have a car
registered, or to be registered, in Michigan OR
have a valid Michigan driver’s license.
However, there are times when a company can
refuse to insure you.
Reasons for Denial
You can be turned down for insurance if:
1. You are not required by law to have no-fault
insurance because you do not intend to live
or drive in Michigan for 30 or more days.
2. Within the past 5 years, you have been
convicted of trying to defraud an insurance
company, or have been denied payment of
a claim over $1,000 because there is
evidence of fraud on your part.
3. Within the past 3 years, you have been
found guilty of a felony with a motor vehicle,
driving under the influence of alcohol or
drugs, failing to stop at the scene of an
accident, or reckless driving.
4. The car you want to insure does not meet
Michigan motor vehicle safety requirements.
5. Within the past 2 years, your auto insurance
has been canceled because of non-
payment of premium. This can be
overlooked if you pay your entire premium
in advance.
6. The insurance you want to buy requires you
to be a member of a group, club or
organization and you do not join the
organization.
7. Your driving record causes you to have
more than the allowable number of eligibility
points.
8. You do not meet the requirements of a
company’s underwriting rules.
9. Your license to operate a vehicle is under
suspension or revocation.
Your Driving Record Makes a Difference
Insurance companies will assign you insurance
eligibility points for certain traffic violations and
accidents. THESE POINTS ARE NOT THE
SAME AS THOSE ON YOUR OFFICIAL
DRIVING RECORD, but are simply a guide to
help the company decide whether you are
eligible for auto insurance. The chart on the
next page shows how insurance eligibility points
are assigned.
You can be denied insurance if you have more
than six (6) eligibility points from violations
within the past 3 years.
Company Guidelines
Insurance companies also use certain
guidelines, called underwriting rules, to help
decide whether they will insure you. These
rules may be different for each company, but
each company must apply its rules in the same
way to everyone. For example, a company
may refuse to insure you if it does not have a
rate for your type of car, if your car is very
expensive to repair or replace (such as custom
or antique cars).