Michigan Car Insurance Requirements

Under Michigan auto insurance laws, it’s illegal for most motorists to drive without both liability insurance and no-fault insurance.
Written by Amy Bobinger
Edited by R.E. Fulton
background
Michigan
law states that all motorists must carry
car insurance
that includes a minimum of $50,000 bodily injury liability per person, $100,000 bodily injury liability per accident, $10,000 property damage liability coverage per accident, personal injury protection, and property protection.

Car insurance coverage requirements in Michigan

When you purchase car insurance in the state of Michigan, your policy will automatically include the following residual
liability insurance
:
  • $250,000 bodily injury residual liability per person
  • $500,000 bodily injury residual liability per accident
  • $10,000 property damage residual liability per accident (for accidents that occur in another state)
However, you can choose lower limits if you’d prefer. The minimum liability limits in Michigan are:
  • $50,000 bodily injury residual liability per person
  • $100,000 bodily injury residual liability per accident
  • $10,000 property damage residual liability per accident (for accidents that occur in another state) 
You’re also required to carry minimum amounts of personal injury protection (PIP) and property protection insurance (PPI).1
Bodily injury residual liability will help pay for another person’s medical or funeral expenses if they are seriously injured or killed in an auto accident that you cause.
Property damage residual liability will cover damages to another vehicle if you’re at fault in an accident—but only for accidents that happen in another state or involve out-of-state vehicles. Michigan’s residual liability insurance will not pay for damages to another driver’s car (unless it was properly parked at the time of the accident—and then it would fall under PPI, not residual liability).
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When you shop for quotes with
Jerry
, your policy will automatically begin with the state minimum liability requirements.
From there, it’s easy to customize your policy to get the exact coverage you need.

Michigan is a no-fault state

In a
no-fault state
, if you’re injured in a car accident, you file a claim with your own insurance to cover things like medical expenses and lost wages. Michigan has an especially robust no-fault system that includes high levels of personal injury protection (PIP) and property protection insurance (PPI) along with the residual liability insurance listed above.
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Property protection insurance will pay for up to $1 million in damages to other people’s property resulting from an accident that you cause. This might include property like buildings, fences, and parked cars—but not moving vehicles. You may have to pay a deductible with PPI.
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Personal injury protection
helps pay for your medical bills, lost wages for up to three years, and replacement services for things you have to hire someone to do as a result of your injuries, like yard work, childcare, or housekeeping. If you were to be killed in an accident, it would pay survivor benefits to your spouse and dependents for up to three years.
If your health insurance covers injuries due to a car accident, you can choose to use your own medical coverage instead of PIP. You’ll have to submit proof of your qualified health coverage (QHC) to your auto insurer when you purchase and renew your policy.
In Michigan, qualified health coverage (QHC) includes: 
  • Medicare Parts A & B
  • Medicare Part C
  • A health insurance policy that 1) covers injuries due to car accidents and 2) has a deductible of no more than $6000

Choose your PIP coverage level

Michigan allows drivers to choose how much PIP coverage they will carry. It is the only state where unlimited PIP coverage is available.2 
The table below summarizes your PIP benefit options under Michigan’s new no-fault law. 
PIP Coverage Level
Coverage Details
Unlimited
  • Pays for any reasonable medical expenses after a car accident with no limit. 
  • If you don’t select a PIP limit, you’ll default to unlimited coverage.
$500,000
  • Pays for medical expenses up to $500,000 per person per accident
$250,000
  • Pays for medical expenses up to $250,000 per person per accident
$250,000 with exclusions
  • Pays for medical expenses up to $250,000 per person per accident for anyone on the policy except named exclusions
  • If the policyholder is excluding PIP medical, they must have qualified health coverage (QHC) that is not Medicare
  • If a resident relative or spouse is excluding PIP medical, they must have QHC
$50,000
  • Pays for medical expenses up to $50,000 per person per accident
  • The policyholder must be enrolled in Medicaid
  • Spouse and any resident relatives must have QHC, be enrolled in Medicaid, or be covered by another car insurance policy with PIP medical
No PIP medical coverage
  • The no-fault policy will not pay for any medical expenses following an accident
  • The policyholder must have coverage under Medicare A and B, or Medicare C
  • Spouse and any resident relatives must have QHC or be covered by another car insurance policy with PIP medical
All Michigan auto insurance policies include some form of PIP: Even if you choose a policy with no PIP medical or you exclude yourself from the coverage, your plan will still include some non-optional PIP coverages, like lost wages, replacement services, and funeral expenses.

Is minimum coverage the most cost-effective option? 

Choosing the minimum no-fault coverage allowed in Michigan might get you lower insurance premiums, but if you’re in a serious accident, you could be under-protected. 
  • You can be sued for up to $3,000 in property damage after an accident. Most states require drivers to carry property damage liability protection that will help pay for another driver’s vehicle repairs after an accident. Michigan’s property damage liability does not cover other people’s vehicles—you have to add mini-tort for that.
  • No-fault liability insurance won’t pay for your own vehicle damages. While your own medical expenses will be covered by your no-fault insurance, if your vehicle needs to be repaired or replaced due to an accident, you’ll pay out-of-pocket unless you have collision coverage.
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To best protect yourself, choose the highest PIP limits you can afford, and add mini-tort and physical damage coverage (comprehensive and collision) to your insurance policy.
The
Jerry
app allows you to select different coverage levels and see how they impact your rate – ensuring you get the coverage that best fits your needs at the best price.

If you have a car loan or you’re leasing a vehicle, your lender will generally require you to carry comprehensive and collision coverage on that vehicle. If you don’t, they can purchase it on your behalf (called
force-placed insurance
) and add the cost to your car note—which is almost always significantly more expensive than if you purchased a policy yourself.

Average cost of insurance in Michigan

Michigan drivers pay an average of $1,199 per year or $167 per month for minimum liability coverage. A standard full-coverage policy in Michigan costs an average of $2,272 per year.
But knowing the average cost of car insurance in Michigan can’t tell you much about what you’ll actually pay. That’s because insurance companies
calculate auto insurance rates
based on a number of unique data points, including your driving record, where you live, the car you drive, your age, and more.
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When you shop for car insurance with the
Jerry
app, it’s easy to adjust your coverage levels, so you can easily see how much you’ll pay for additional protection with various providers.
Consider enhancing your Michigan no-fault auto insurance policy with some of these additional protections:
  • Mini-tort: Also known as limited property damage liability, this will cover the other driver’s expenses (like the cost of their deductible or physical damages to their vehicle) for up to $3000 if you’re found 50% or more at fault for an accident.
  • Collision coverage
    : Helps pay for your own vehicle damages after an accident. Michigan has three forms of collision insurance.
Broad form collision
Standard form collision 
Limited form collision
  • Applies regardless of fault
  • You only pay a deductible if you’re substantially at fault
  • Applies regardless of fault
  • You pay a deductible on every collision claim
  • Only applies if you are not substantially at fault
  • You may or may not have to pay a deductible
  • Comprehensive coverage
    : This coverage will help pay for your car for damage or loss due to things like theft, vandalism, fire, flood, severe weather, or a collision with an animal.
  • Uninsured/underinsured motorist coverage (UMBI/UIMBI)
    : This coverage will help cover your medical bills if you’re in an accident with an uninsured driver or a driver whose liability limits won’t cover your expenses. 
  • Gap insurance
    : If you owe more on your vehicle than it’s worth and you total it, gap insurance will cover the difference between the actual cash value (ACV) of your car and the remainder of your loan.
  • Towing and labor
    : Also known as roadside assistance, this coverage will come to your aid if you need help changing a flat tire, unlocking your car, jumpstarting your battery, and more. 
  • Rental reimbursement
    : If your car is damaged in a covered loss, rental reimbursement will help you secure a temporary replacement while your vehicle is being repaired.
  • Attendant care rider: Attendant care is a coverage that pays for assistance with daily tasks (like dressing or bathing) if you’re injured in an accident. It’s already part of Michigan’s PIP, but you can purchase additional coverage (unless you already have unlimited PIP benefits).

Penalties for driving without insurance in Michigan

If you
drive without insurance in Michigan
, you won’t be eligible for the state’s no-fault PIP coverage if you get into an accident—so any medical bills or lost wages as a result of that accident will not be covered. You could also face the following penalties:
  • A fine of $200 to $500
  • Up to one year in jail
  • License suspension for 30 days or until you show valid
    proof of insurance
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FAQs

What is the new car insurance law in Michigan?

Michigan’s new auto insurance law raised the minimum liability coverage limits from 40/20/10 to 50/25/10. The new law also created more options for PIP coverage.

What is considered full coverage in Michigan?

In Michigan, full coverage is made up of comprehensive and collision coverage, plus at least the state’s minimum required no-fault coverage.

Do all household members need to be on car insurance in Michigan?

You must add your spouse and any resident family members to your car insurance policy in Michigan.

Why is car insurance so expensive in Michigan?

Michigan’s no-fault insurance requirements offer a relatively high level of protection, which can make your insurance costs higher.

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