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Michigan car insurance laws

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By law, all Michigan drivers are required to carry car insurance. More specifically, drivers must have a minimum amount of car insurance and certain types of insurance in order to comply with state laws. Driving without enough insurance coverage is illegal and comes with heavy consequences, even for first-time offenders.

Whether you are a lifelong Michigander or are a new Michigan driver, having a solid understanding of Michigan car insurance laws is important. Recently, Michigan changed the state’s car insurance laws. The Michigan auto insurance reform altered the laws around PIP coverage, which affects all Michigan drivers.

Keep reading to learn more about the latest car insurance requirements in Michigan.

Car insurance laws in Michigan

Michigan drivers are required to follow several car insurance laws. Some of these laws are different from other states because Michigan is considered to be a no-fault state. Here are the basic laws around car insurance in Michigan:

  • Insurance requirement: Michigan requires all drivers to carry a minimum amount of car insurance coverage as determined by state law.
  • Proof of insurance: Michigan drivers must carry proof of insurance in their vehicle at all times. Electronic proof of insurance is acceptable.
  • Failure to show proof of insurance: Drivers who cannot provide proof of insurance when asked by law enforcement can have their license suspended.
  • Minimum insurance requirements: Drivers must carry a minimum of 50/100/10 liability insurance, Personal Injury Protection (PIP) and Property Protection Insurance (PPI).

Liability insurance in Michigan

Michigan requires all drivers to carry bodily injury liability coverage and property damage liability coverage. In Michigan, this coverage is often abbreviated as 50/100/10. Liability insurance covers a driver’s legal fees if they get sued after hitting another driver or causing property damage. Here is what liability insurance in Michigan covers:

  • $50,000 in bodily injury liability coverage per person
  • $100,000 in bodily injury liability coverage per accident
  • $10,000 in property damage liability coverage per accident

Drivers who carry the minimum liability coverage in Michigan will usually pay the lowest rate. However, most insurance companies recommend that drivers purchase more liability coverage than is required. There is no guarantee that Michigan’s minimum liability coverage limits will cover the full cost of an accident.

For example, imagine that a driver runs through a business storefront and causes $30,000 in property damage. If the driver carries the minimum property damage insurance, which is $10,000, they would have to pay the remaining $20,000 out-of-pocket. In Michigan, insurance companies are only required to pay up to the liability coverage limit in the event of a covered loss.

Is Michigan a no fault state?

Michigan is one of 12 no-fault states in the United States. Drivers in no-fault states usually pay more for their insurance coverage, but they also get more protection. The no-fault law requires Michigan drivers to carry Personal Injury Protection (PIP). Property Protection Insurance (PPI) is also required. Here is what those coverages entail:

  • Personal Injury Protection: After an accident, PIP coverage pays for medical expenses and lost wages, regardless of which driver caused the crash. Under the new Michigan law, consumers have a choice of 6 options for PIP medical coverage. The default coverage has no maximum limit. If a driver is killed in an accident, their insurance company will pay their dependents a death benefit.
  • Property Protection Insurance: If a driver causes property damage in Michigan, their PPI coverage will pay up to $1 million to repair the damages. This coverage applies to stationary objects like another person’s buildings, fences, and parked cars. If the damage occurs outside Michigan, their property damage liability coverage will pay for the damages.

Penalties for driving without insurance in Michigan

Driving without car insurance coverage in Michigan is illegal and comes with consequences. Michigan drivers who cannot show proof of car insurance may have their license suspended by the Secretary of State. To get your license reinstated, drivers might need to secure an SR-22 and pay a fine. If a driver does not show proof of insurance within a designated time frame, the Secretary of State has the right to cancel their car’s license plates.

Additional auto insurance coverage options in Michigan

Although Michigan drivers are only required to carry liability, PIP, and PPI coverages, many drivers choose to purchase optional coverages. Buying optional coverages will increase your car insurance premium, but you will get more protection. Here are some of the most common add-on coverages available to drivers in Michigan:

  • Collision insurance: Collision insurance pays to repair your vehicle’s damages after a covered accident. Collision insurance does not pay to repair another driver’s car if you cause an accident.
  • Comprehensive insurance: Comprehensive insurance pays to repair your vehicle’s damages after non-accident incidents, like floods and falling objects. This coverage also pays for vehicle theft.
  • Uninsured/underinsured motorist insurance: Uninsured/underinsured motorist coverage pays for vehicle damages if you get into an accident with a driver who does not have insurance or does not have enough insurance to cover the losses.
  • Roadside assistance: Roadside assistance covers certain vehicle repairs, towing, battery replacement and refueling if your car breaks down.

Frequently asked questions

What is the best car insurance company in Michigan?

There are dozens of car insurance companies in Michigan and each one has its strengths and weaknesses. Based on our review, some of the best car insurance companies in Michigan are Geico, USAA and Erie.

How much does car insurance cost in Michigan?

In Michigan, the average full coverage car insurance premium costs $2,375 per year. In comparison, the United States average premium is just $1,738 per year. For a variety of reasons, Michigan is one of the most expensive states for car insurance.

What is the cheapest car insurance company in Michigan?

Most drivers are looking for an affordable rate when shopping for insurance in Michigan. Although car insurance in Michigan is more expensive than average, there are several providers that are known for offering more reasonable rates. Michigan drivers who are looking for cheap insurance should consider Geico, Progressive and USAA.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, and NextAdvisor, among others