Michigan Car Insurance Laws
Auto insurance requirements in Michigan
Michigan has historically been one of the more expensive states in which to buy insurance. This is because the state requires far more coverage than others. To be a legal driver in Michigan, you must adhere to the state’s guidelines[1], or else you could face steep penalties. Find out more about Michigan insurance requirements and optional coverages below.
| Minimum Liability Coverage: 50/100/10 | Personal Injury Protection (PIP) | Property Protection Insurance (PPI) |
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While these are the state-mandated coverage requirements, a lender or leasing company may require coverage to protect your vehicle against physical damage, sometimes known as full coverage.
Property protection insurance
Property protection insurance provides coverage up to $1,000,000 for damage that you may cause to fixed objects during an accident. These could include objects such as:
- Buildings
- Road signs
- Road construction equipment
- Fences and barriers
- Parked vehicles
This does not provide coverage for damage to other vehicles unless they are parked.
Michigan is a no-fault state for car insurance
No-fault insurance laws require that when an accident happens, no matter who is at fault, your own insurance foots the bill.
Each driver takes care of himself or herself, and theoretically, the chances of someone suing or arguing over culpability are lessened. A perk of such laws is that it guarantees every driver immediate medical treatment in the event of an accident.
PIP coverage in Michigan
Personal injury protection (PIP) coverage can be coordinated with your health insurance to decrease the cost of your auto insurance premium or can provide primary medical coverage for injuries resulting from an auto accident if you happen to not have health insurance. The PIP selection will depend on the details of your health coverage. Read the fine print on your medical policy carefully to determine the proper choice for your auto policy.
Because Michigan is a “no-fault” state and PIP coverage does not have a dollar-specific cap, a driver’s right to sue is restricted to extreme situations involving death, permanent disfigurement or disability resulting from an auto accident.
In July 2020, the state of Michigan implemented a no-fault reform law that changed the amounts of PIP coverage that drivers can choose. The following options are now available:
- Unlimited
- $500,000
- $250,000
- $50,000 (lowest option available for Medicaid recipients)
- Opt-out (available only for those with qualifying health care plans)
Liability coverage requirements in Michigan
Liability coverage is legally required in Michigan. It pays for bodily injuries and property damage of those that you harm in an at-fault accident. It also pays for the injured party’s lost wages and pain and suffering. Your liability coverage never pays for your injuries or damages to your property.
With Michigan being a “no-fault” state, the liability coverage required on your policy mainly serves to provide coverage if you are involved in an “at-fault” accident out of state. However, it can also come into play inside state lines in extreme cases, such as if you cause death or permanent disability or disfigurement. It is important to note that property damage liability does not cover damage caused within the state of Michigan.
What are state-mandated car insurance limits?
In car insurance, the limit is the maximum amount that your insurance company will pay in the event of a claim. Liability coverage limits are determined by each individual state and are normally split into three categories: bodily injury per person, bodily injury per accident and property damage. In Michigan, the minimum is listed as 50/100/10 and explained below:
- $50,000 bodily injury coverage per person is the maximum dollar amount that pays for a single person that you injure in an auto accident.
- $100,000 bodily injury coverage per accident is the maximum dollar amount that pays for all injuries that you cause in an accident if more than one person is hurt.
- $10,000 property damage coverage for accidents caused outside of Michigan. This is the maximum dollar amount that pays for damage that you cause in an accident that occurs outside of the state of Michigan.
PIP and property protection insurance are fairly straightforward. For PIP, the amount that you choose is the total amount available for all injuries. Those who choose unlimited, for instance, can expect unlimited PIP coverage. Property protection insurance limits are $1 million.
What is attendant care and how is it changing in Michigan?
When someone is injured in an accident and no longer able to take care of their daily needs, attendant care helps to pay a nurse or family member for daily assistance. However, effective July 1, 2021, Michigan's new no-fault reform law stipulates that insurance companies are only required to pay for 56 hours per week of family-provided in-home care. Furthermore, insurance companies will now only reimburse rehabilitation providers at 55% of what they were in 2019 for any services not covered by medicare.
Do Michigan’s required minimums provide enough coverage?
Michigan’s car insurance laws are some of the most robust in the nation. In theory, this means that Michigan motorists are pretty well covered for any bodily injury that they sustain. However, be aware that there are some gaps that could leave you at risk. For instance, adding physical damage coverage can be a good way to mitigate risk and protect your own vehicle, especially if you are traveling outside Michigan. In short, having coverage levels that are higher is always a good idea, so long as you can reasonably afford your premium.
Michigan’s penalties for driving without proof of insurance
If you are found guilty of driving with no insurance in Michigan, you are charged with a misdemeanor and can expect the following penalties to apply[2]:
- A fine between $200 and $500
- License suspended for up to 30 days (plus reinstatement fee)
- A “driver responsibility” fee of $500 for two years
- Up to one year in prison
- Court costs
Optional car insurance coverage in Michigan
Michigan law requires a number of different coverage types. However, most insurance carriers offer further coverage options that can be quite useful. Here is a list of some of the more common options available:
- Comprehensive: This coverage pays for damages to your vehicle that occur in non-collision circumstances. It covers perils such as theft and damage related to weather events.
- Collision: This coverage pays for damages to your vehicles that result from a collision with another vehicle or stationary object.
- Loan/Lease Payoff: Sometimes referred to as gap coverage, this coverage will pay the difference between what you owe on a loan and your vehicle’s actual cash value. This can help in the event that you owe more than your car is actually worth.
- Rental Car Reimbursement: If your car is unable to be driven, this coverage can help pay for a rental car until yours can be fixed.
- Roadside Assistance: Most insurance companies offer some type of roadside assistance that can help with flat tires, dead batteries, and other unexpected expenses.
- Uninsured/Underinsured Motorist Coverage: This coverage will help pay if you are in an accident in which an uninsured driver is at fault.
Why adhering to Michigan’s car insurance requirements is important
Even if the prices are higher than average, carrying car insurance in Michigan is required. Not all coverages are legally mandated, but adding coverage or increasing your current limits is recommended for most drivers in order to further protect assets. However, if you’re worried about an increase in your premiums, it may be time to shop for cheaper coverage. The Zebra is a great place to see side-by-side insurance quotes from the nation’s top carriers.
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