Michigan’s auto insurance laws clearly state that drivers in the Great Lakes state must have certain auto insurance policies in order to legally drive on public roads. Failure to do so may result in fines and other penalties, as well as higher compensation rates in the future. Michigan is a no-fault state, which further complicates how car insurance protects you financially and how you receive compensation for your claim.
Michigan auto insurance laws
Michigan drivers must follow several auto insurance laws. Because Michigan is considered a no-fault state, some of these laws are different from other states. The basic laws regarding car insurance in Michigan are as follows:
- Insurance requirements: Michigan requires all drivers to carry the minimum amount of auto insurance required by state law.
- Insurance card: Michigan drivers are required to carry proof of insurance in their vehicle at all times. Failure to provide physical or electronic proof of insurance when requested by law enforcement may result in license suspension, a fine of up to $500, and up to one year in prison.
- If you do not present your insurance card: Drivers who fail to provide proof of insurance when requested by law enforcement may face a license suspension, hefty fines, and even jail time.
- Minimum insurance requirements: Drivers must carry at least 50/100/10 liability insurance, personal injury insurance (PIP), and property protection insurance (PPI). However, the state default is 250/500/10, which helps provide more financial protection after an at-fault accident. If you choose less than this amount, you must sign a waiver approved by the Director of Insurance and Financial Services.
Michigan Minimum Insurance Requirements
Michigan has minimum requirements for personal injury and property damage, sometimes referred to as residual liability insurance. Minimum coverage is abbreviated as 50/100/10 and means:
- Liability for personal injury is $50,000 per person.
- Total personal injury liability of $100,000 per accident.
- $10,000 property damage liability per accident
Default personal injury and property damage liability limits are 250/500/10. This means that these limits are what you typically receive a quote for when purchasing car insurance in Michigan.
However, because Michigan is a no-fault state, liability insurance works differently. In most other states, non-at-fault drivers can file a claim directly against at-fault driver liability insurance. In Michigan, liability insurance typically applies only when a non-at-fault party sues an at-fault driver for serious injury, death, or pain and suffering beyond what is covered by his or her insurance policy (PIP).
Insurance experts recommend purchasing as much coverage as possible if you can afford it. This is because if you are sued after a serious accident, the minimum amount may not financially cover you.
Michigan No-Fault Insurance Coverage Requirements
You will also need to take out additional coverage such as Personal Injury Insurance (PIP) and Property Protection Insurance (PPI). Michigan is a no-fault state. In no-fault states, drivers file a claim with their own insurance company even if the other driver caused the accident. When this happens, PIP and PPI coverage helps prepay the costs incurred in the accident, and the insurance company recovers all the costs of the accident from the at-fault party’s insurance company through a process called subrogation.
PIP pays for medical expenses and lost wages. In Michigan, policyholders have six options for PIP coverage from which to choose, including a default option with no cap.
PPI covers property damage to someone else’s fixed assets, such as fences, parked cars, and homes. This coverage pays up to $1 million for covered damages.
Penalties for driving without insurance in Michigan
In Michigan, it is illegal to drive without insurance. If you are caught doing this, your license may be suspended until you submit proof of insurance. You could be subject to a fine of up to $500 and a reinstatement fee of at least $125. Additionally, you may be restricted from registering your vehicle until proof of insurance is verified, and you may be required to purchase an SR-22 Certificate of Financial Responsibility to have your license reinstated. According to state law, he could be sentenced to up to a year in prison.
Additional Auto Insurance Coverage Options in Michigan
Michigan drivers are only required to have liability, PIP, and PPI coverage types, but many drivers choose to purchase optional coverage. Purchasing optional coverage types will increase your car insurance premiums, but will give you more financial protection. Here are some of the most common add-on coverage types available to Michigan drivers.
- collision insurance: In Michigan, collision insurance pays to repair damage to your vehicle after an accident with another vehicle or a fixed object, such as a utility pole. Michigan has three levels of collision coverage, and unlike other states, you must have insurance to pay for damage to your car even if you are not at fault for the accident. Under Michigan’s “mini-tort” law, you may be able to recover up to $1,000 from an at-fault driver to compensate for damage to your vehicle, but this is often not enough to pay for the damages caused by your collision.
- Comprehensive insurance: Comprehensive insurance pays to repair damage to your vehicle after a non-accidental incident, such as a flood or falling object. This coverage also covers vehicle theft, vandalism, fire, and cracked windshields. Comprehensive insurance also has insurance deductions.
- Uninsured/Underinsured Motorist Insurance: Uninsured and underinsured motorist coverage pays for injuries and damage to your vehicle in the event of an accident caused by a driver who is uninsured or does not have enough insurance to cover your losses.