In Michigan, as in most states, it is a legal requirement for drivers to have a minimum amount of car insurance. Driving without insurance or failing to meet the Michigan auto insurance requirements can lead to penalties such as fees, license suspension and even imprisonment. Michigan auto insurance laws are some of the strictest in the country. In 2020, the state introduced new laws to address high insurance costs. These laws aim to lower expenses while still keeping coverage robust and to enhance driver protections. Among other measures, insurers have been mandated to decrease average premiums statewide for the next eight years per the legislation. Understanding Michigan car insurance laws is key to ensuring that you are meeting the requirements and are legally permitted to drive within the state.

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 a no-fault state. Here are the basic laws around car insurance in Michigan:

  • Insurance requirement: Michigan requires all drivers to carry at least a minimum amount of car insurance coverage as determined by state law.
  • Proof of insurance: Michigan drivers must carry proof of insurance in their vehicles 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 may have their license suspended.
  • Minimum insurance requirements: Drivers must carry at least a minimum of 50/100/10 liability insurance, Personal Injury Protection (PIP) and Property Protection Insurance (PPI). The state’s default, however, is 250/500/10 to help provide more protection following an accident. Those who choose less than this amount will need to sign a waiver approved by the Director of Insurance and Financial Services.

Minimum insurance requirements in Michigan

Michigan has minimum requirements for bodily injury and property damage liability. These coverage options help protect the other car if you are in an accident, as well as property that you do not own. The minimum coverage is abbreviated as 50/100/10, which means:

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

The default bodily injury and property damage liability coverage limits are 250/500/10, which means these limits are what you would normally receive a quote for when you are purchasing Michigan insurance. These amounts offer more robust coverage than the minimum required but also cost more. If you can afford the increased coverage, insurance experts would generally recommend buying as much coverage as possible because the minimum might not cover you in a serious accident.

You are also required to carry additional types of coverage, including personal injury protection (PIP) and property protection insurance (PPI). This is because Michigan is a no-fault state. In no-fault states, drivers file claims with their own insurer, even if the other driver caused the accident. If this happens, PIP and PPI coverages help pay for the expenses incurred in the accident up front, and your insurer will work with the at-fault party’s insurance company to have them cover the damages.

PIP pays for medical expenses and lost wages. In Michigan, there are six options for PIP coverage that the policyholder can choose from, including a default option with no maximum limit.

PPI pays for property damage to other people’s property, including fences, parked cars or homes. This coverage will pay up to $1 million for these damages.

The last time of insurance that is part of a no-fault policy is residual bodily injury and property damage liability. The minimum coverage levels for this are 20/40/10. This coverage helps pay for defense costs and damages if you are found to be liable for an accident in which someone was seriously hurt or killed.

Penalties for driving without insurance in Michigan

It is illegal to drive without insurance coverage in Michigan. If you are found to be doing so, you may have your license suspended until you provide proof of insurance. You may face fines of up to $500, as well as a reinstatement fee of at least $125. Additionally, your ability to register your car may be restricted until you have verified proof of insurance, and you may be required to purchase an SR-22 to get your license reinstated.

Additional auto insurance coverage options in Michigan

Although Michigan drivers are only required to carry liability, PIP, and PPI coverage types, many drivers choose to purchase optional coverage. 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. A collision deductible applies in a claim situation.
  • 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. Comprehensive insurance also has a claim deductible.
  • Uninsured/underinsured motorist insurance: Uninsured and underinsured motorist coverage pays for injuries and 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.
  • Residual Bodily Injury Liability: If you are involved in an accident that causes serious injury to someone else, residual bodily injury liability (BI) offers protection to cover medical expenses that result from the accident.

Frequently asked questions

    • Many car insurance companies offer coverage in Michigan, including national and regional options, and each comes with its own strengths and weaknesses. Based on our review, some of the best car insurance companies in Michigan currently include Geico, USAA, Progressive, Auto-Owners, and Travelers Insurance. The best way to find the best car insurance for you, however, is to request quotes from multiple companies for the same types and amounts of coverage and compare them.
    • In Michigan, the average full coverage car insurance premium costs $3,336 per year. Minimum coverage in the state typically costs $1,190 per year. By comparison, the United States average premium is $2,542 per year for full coverage and $740 per year for minimum coverage. For a variety of reasons, including the state’s insurance laws, Michigan is one of the most expensive states for car insurance on average.
    • 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 providers that are known for offering more reasonable rates. Michigan drivers looking for cheap insurance might want to consider shopping around and requesting quotes from multiple carriers to compare coverage rates and find an option that best suits their budget.