Michigan Car Insurance Laws & Requirements

The only law in the state that affects car insurance requirements is the no-fault law. Several states have no-fault laws in place, but each state dictates different requirements for its drivers. Keep reading to learn more about how the no-fault law affects auto insurance requirements in Michigan.

Michigan insurance laws and regulations require all drivers to have at least $50,000 of bodily injury liability per person per accident, $100,000 of bodily injury per accident, and $10,000 of property damage liability per accident (or 50/100/10 liability coverage), about $250,000 of personal injury protection (PIP), and up to $1 million of PPI on their car insurance policies. While many states require all drivers to carry some liability insurance, PIP and PPI are specific coverages required in states with no-fault laws.

Every driver with a vehicle registered in the Great Lakes State is required to have car insurance. Michigan’s state minimum auto insurance requirements mandate liability coverage, PIP, and PPI on all car insurance policies in the state. States with no-fault laws typically require policyholders to carry two separate coverages to help cover the cost of their own medical expenses and repairs to their property or vehicle in the event of an accident.

Under Michigan’s no-fault law, drivers must have around $250,000 of PIP to help cover the cost of medical expenses accrued due to an accident, with lower limits available to those with Medicare or Medicaid health insurance. Drivers must also carry up to $1 million of PPI to help cover the cost of repairs for the other party’s property damaged in an accident, regardless of who is at fault in the accident.

Drivers in Michigan need at least 50/100/10 in liability coverage, at least $250,000 in PIP, and no more than $1 million in PPI on their car insurance policies. The state has some of the highest car insurance minimums in the country, and some drivers may feel that the expense isn’t feasible. However, drivers who fail to have the necessary car insurance coverage may face some hefty consequences. 

Let’s take a closer look at what you need on your car insurance policy in Michigan.

Michigan law requires all drivers to carry at least 50/100/10 in liability insurance. This means drivers must have at least $50,000 in bodily injury liability per person per accident, $100,000 in bodily injury per accident, and $10,000 in property damage liability per accident. While this is the minimum required liability coverage in the state, many drivers opt for more liability coverage. The average liability coverage drivers carry on their car insurance policies is 250/500/10.

Liability coverage helps to cover the cost of medical expenses or property repairs accrued by the victim of an accident caused by the policyholder. Liability coverage is an at-fault coverage type but is still required in the state. 

Michigan auto insurance regulations require drivers to carry around $250,000 in PIP on their policies. PIP is a coverage type mandated by no-fault laws that policyholders carry to cover the cost of their own medical expenses accrued in an accident, regardless of who is deemed at fault for the accident.

Before 2020, the state required all drivers to carry unlimited PIP. The Michigan auto insurance laws have since changed, and many drivers can lower their PIP limit to $250,000. Drivers with Medicare, Medicaid, or a participating health insurance may be eligible for a lower PIP limit.

Drivers in Michigan must carry some PPI level on their policies, at most $1 million in coverage. PPI is a no-fault coverage type that kicks in to help the policyholder cover the cost of repairs to the other party’s vehicle or property damaged in an accident, regardless of who is at fault. PPI will not kick in to cover the cost of repairs on a vehicle in use while it was damaged. PPI will only cover property like fencing, mailboxes, or parked cars.

While seeing six figures on your policy may shock you, PPI is a relatively inexpensive coverage type. On many policies, PPI only makes up about 20% of the premium’s total cost.

In Michigan, car insurance requirements mandate minimum coverage limits all drivers must carry on their policies. Some of these minimums are standard, and some are unique to the state. The minimum liability coverage requirement of 50/100/10 is relatively common and is required in many states. Since Michigan is a no-fault state, the law requires drivers to carry no-fault coverages, such as PIP and PPI. 

In no-fault states, drivers will file a claim with their own insurer to receive the payout from their PIP to cover the medical expenses accrued due to an accident. In states without no-fault laws, drivers will file a claim with the at-fault party’s car insurance to receive a payout from their liability coverage. Liability coverage is an at-fault coverage, meaning policyholders carry this coverage to help cover the cost of medical expenses or repairs accrued by the victim of an accident caused by the policyholder. 

While Michigan is a no-fault state, drivers must carry liability coverage. In some cases, after filing a claim with your insurer to invoke your PIP or PPI, your insurer may investigate the cause of the accident to deem a party at fault. In the event the at-fault party has adequate coverage, your insurer would connect with the at-fault party’s insurer to get them to help cover the cost of your medical expenses and repairs.

All drivers in Michigan must have the state minimum auto insurance. If you don’t have the legally required amount of car insurance, you could face hefty fines, license suspension, or jail time.

Here at Clovered, we recommend carrying more than the coverage amounts of required minimum car insurance in Michigan to keep you safe on the roads and to avoid the serious consequences you may face if you aren’t sufficiently covered.

Over 20% of drivers in the state are uninsured or underinsured. This high population of inadequately insured drivers is one of the reasons Michigan adopted a no-fault law. PIP and PPI act as a policyholder’s protection against uninsured drivers, as these coverages help cover the policyholder’s expenses. If an insured person were to get into an accident caused by an uninsured or underinsured person in an at-fault state, the insured person wouldn’t have the at-fault party’s liability coverage to rely on to pay for their medical expenses or repairs to their vehicle.

To ensure your safety on the Great Lakes State’s roads, it’s a good idea to carry uninsured/underinsured motorist coverage on your car insurance policy. While it isn’t required by the state and is entirely up to the policyholder to add it to their policy, it’s a great additional coverage to help protect drivers.

There are several car insurance coverages required in Michigan. All drivers must carry the state-mandated amounts of liability coverage, PIP, and PPI. Some drivers feel comfortable having the minimum car insurance in Michigan, while others prefer to exceed the mandatory coverages and opt for a full coverage policy with additional coverages.

The mandates for those who own their vehicles may differ from those who finance or lease their cars. Many lenders or leasers will require drivers to have a full coverage auto insurance policy with collision coverage. Collision coverage isn’t required by law in the state and is considered optional for those who own their vehicles.

Michigan’s no-fault law exists to protect responsible drivers who carry auto insurance if they get into a car accident with a driver who isn’t sufficiently insured. Say a policyholder with adequate PIP and PPI were to get in an accident caused by someone without insurance. In states without no-fault laws, the policyholder wouldn’t have the at-fault party’s liability coverage to rely on to cover their expenses.

However, because of the coverages mandated by the no-fault law, the policyholder would file a claim with their own insurance to receive a payout from their PIP and PPI to help them cover the cost of their medical expenses and the repairs to other party’s vehicle or property.

While car insurance is expensive in Michigan, and there are required coverages you must have on your policy, we recommend at least meeting the state-mandated minimums. If you have room in your budget for more coverage, we at Clovered highly recommend a full coverage policy. While a full coverage policy will be more expensive than a policy with minimum coverage, there may be ways you can save on your premiums without sacrificing your coverage.

To see if you’re getting the best bang for your buck when it comes to your auto insurance, we recommend shopping around online for quotes. Getting and comparing quotes online is the best way to see if you’re overpaying with your current insurer or if you could be getting discounts or lower premiums if you switch to a different insurer.

With our free quoting tool, you can start your quoting journey here at Clovered. If you prefer to get a quote with an agent rather than online or if you have a question about your quote, feel free to call us at 833-255-4117 or email us at agent@clovered.com.