Michigan Department of Insurance Laws

State Insurance Departments

State of Michigan Car Insurance Requirements

Michigan No-Fault Auto Insurance Requirements:

Michigan has the most comprehensive no-fault auto insurance system in the nation. If your vehicle is insured in Michigan, you and your family will be provided with unlimited medical and rehabilitation benefits, wage loss benefits and $20 per day for replacement services for up to three years if you are injured in an auto accident, regardless of fault. This security is one of the most important reasons to purchase insurance.

In addition to the security that insurance provides to you and your family, Michigan law requires no-fault insurance. Every registered vehicle must be insured. If you own a car and you drive it, or allow someone else to drive it without basic no-fault insurance, you can be sued and held personally liable. You may also be convicted of a misdemeanor and fined from $200 to $500, or put in jail for up to one year, or both.

The court may also order your license suspended for 30 days or until you are able to provide such proof. In addition, if you are uninsured you may be held liable for all damages that result from an accident while uninsured, including your own.

What Michigan auto insurance coverage do I have to purchase?

There are three basic parts to a no-fault policy that must be purchased and carried on every vehicle. They are:

Personal Injury Protection (PIP) - Personal injury protection (PIP) pays all necessary medical costs if you are hurt in an auto accident.

Property Protection (PPI) - Property protection (PPI) pays up to $1 million for damage your car does in Michigan to other people's property, such as buildings and fences.

Residual Bodily Injury and Property Damage Liability Insurance (BI/PD):

Residual bodily injury and property damage liability (BI/PD) pays your defense costs and any damages you are found liable for as the result of an auto accident, up to the limits of the policy.

The minimum Michigan insurance limits of coverage that everyone must purchase are $20,000 for a person who is hurt or killed in an accident, $40,000 for each accident if several people are hurt or killed, and up to $10,000 for property damage in another state. These minimum limits are often referred to as 20/40/10. You can also purchase additional limits of BI/PD coverage, which will be explained in the next section.
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