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Arc of Systems Change: Driving Michigan’s auto insurance reform

The arc of systems change starts with listening to community input to set a collective research agenda and then analyzing data and research help to identify policy gaps. Next, we identify possible solutions and propose evidence-based interventions. Finally, we support the implementation of new policies and practices and evaluate the outcome.

In May, Michigan lawmakers reformed the state’s auto insurance policies. The legislation included many of the recommendations that came out of Poverty Solutions’ research, such as eliminating automatic unlimited personal protection coverage, imposing fee limits on medical care related to personal injury accidents, and restricting the use of non-driving factors like credit score and zip code to set auto insurance rates.


The cost of auto insurance was not on the radar for Poverty Solutions staff when they began evaluating a job training program in Detroit in 2018. But it kept coming up as a barrier preventing people from owning a vehicle or driving it legally — thus limiting their job options.  

“We didn’t look for it; we didn’t expect it,” said H. Luke Shaefer, Poverty Solutions faculty director. “But it came up over and over again as a major barrier to getting to jobs, schools, health appointments all the things people need to live healthy and productive lives. While I had never thought of it as such, it is a poverty issue in Michigan.”


To demonstrate how the cost of auto insurance impacts economic mobility, Patrick Cooney, Joshua Rivera, and Elizabeth Phillips decided to find out how much Michiganders spend on auto insurance as a percentage of their total income. Using data from The Zebra, an auto insurance rate comparison company, they found that in 97% of Michigan ZIP codes, the average cost of auto insurance exceeds 2% of the median income, which the U.S. Treasury Department deems “unaffordable.” 

“What was striking was that you could see the problem starting to spread throughout the state, particularly in Southeast Michigan,” said Rivera, a senior data and policy adviser for Poverty Solutions’ Detroit Partnership on Economic Mobility. “While there was a heavy concentration of unaffordability in the City of Detroit, it was creeping over time to the suburbs. More people had a stake in whether or not reform happened.”

Identify Possible Solutions

Gov. Gretchen Whitmer signs legislation reforming Michigan’s auto insurance regulations on May 30, 2019. (© Kathleen Gray/ Detroit Free Press/ ZUMA Wire)

Poverty Solutions published a policy brief in March that shared those findings and identified evidenced-based options to reduce the cost of auto insurance in Michigan. Gov. Gretchen Whitmer cited the research in a mandate in early May for the state’s Department of Insurance and Financial Services to review how auto insurance rates set and strengthen consumer protections. 

Around the same time, U.S. Congresswoman Rashida Tlaib, D-Detroit, invited Rivera to testify on Michigan’s auto insurance policies before the U.S. House Financial Services subcommittee, and Poverty Solutions staff shared their findings at auto insurance town hall meetings in Detroit. 

Related: Auto insurance and economic mobility in Michigan: A cycle of poverty


After weeks of debate over proposed bills and years of calls for auto insurance reform lawmakers passed the auto insurance reform measures at the end of May with bipartisan support. 

Shaefer said it’s uncommon to see research so quickly translate to a change in state law.

I think it had the impact it did because it was the right type of research product, at the right time,” he said. “It looked at the issue from a different angle than other work had, and I like to think it provided some concrete, non-partisan policy recommendations — recommendations that straddle party lines.”


Still, critics question whether the new law will equate to a meaningful reduction in costs for consumers as promised. Shaefer says Poverty Solutions will continue to monitor the issue, assess the impact of the reform, and consider other ways to make auto insurance more affordable in Michigan. 

“One bill isn’t the end of work on a policy area,” Rivera said. “It’s the beginning of a conversation on how to do better.”