Michigan Car Insurance Laws | Bankrate

Michigan car insurance laws clearly state that drivers in the Great Lake State must have a certain level of car insurance to legally drive on public roads. Failure to do so could result in fines and other penalties — and could affect your insurance premium, too. Michigan’s car insurance regulations are some of the strictest in the country, but laws were recently passed to lower the premiums you pay. In this guide, Bankrate’s insurance editorial team explains what types of insurance you need and how to find the best, most affordable insurance for your situation.

Car Insurance Laws in Michigan

Drivers in Michigan must follow several laws regarding car insurance. Some of these laws are different from those in other states because Michigan is considered a no-fault state. Here are the basic laws regarding car insurance in Michigan:

• Insurance needs: Michigan requires all drivers to have auto insurance with a minimum amount of coverage established 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 provide proof of insurance: Drivers who cannot provide proof of insurance when requested by the police may have their license revoked and face heavy fines and possibly imprisonment.
• Minimum insurance requirement: Drivers must carry liability insurance with a minimum of 50/100/10 coverage, personal injury insurance (PIP) and property insurance (PPI), but the state’s standard is 250/500/10 to provide more financial protection after an at-fault accident. Those choosing a lower amount must sign a waiver approved by the Director of Insurance and Financial Services.

Minimum Insurance Requirements in Michigan

Michigan has minimum liability insurance requirements for bodily injury and property damage. These coverage options help financially protect the other car and its passengers in the event of an accident, as well as property that is not yours. The minimum coverage is abbreviated as 50/100/10, which means:

• $50,000 personal injury liability insurance per person per accident
• $100,000 total liability for personal injuries per accident
• $10,000 property damage liability per accident

The standard coverage amounts for bodily injury and property damage are 250/500/10, meaning these amounts are the amounts you will typically receive a quote for when you purchase auto insurance in Michigan. These amounts provide more comprehensive protection than the minimum required, but they also cost more. If you can afford the increased coverage, insurance experts generally recommend purchasing as much coverage as possible, as the minimum may not financially protect you in the event of a serious accident.

No-Fault Insurance Coverage Requirements in Michigan

You’ll also need to purchase additional types of insurance, including personal injury insurance (PIP) and property 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. In this case, PIP and PPI coverages help pay the costs incurred from the accident up front, and your insurer will recover all costs incurred from the accident from the at-fault party’s insurer through a process called subrogation.

PIP covers the cost of medical treatment and lost wages. In Michigan, there are six PIP coverage options from which the policyholder can choose, including a standard option with no maximum limit.

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

The final type of coverage that is part of a no-fault policy in Michigan is bodily injury and property damage liability coverage. The minimum coverage for this is 20/40/10. This coverage helps pay for defense costs and damages if you are found liable for an accident in which someone is seriously injured or killed.

Penalties for driving without insurance in Michigan

It is illegal to drive without insurance in Michigan. If you are caught doing so, your license may be suspended until you provide proof of insurance. You could face fines of up to $500, as well as a reinstatement fee of at least $125. In addition, your ability to register your car may be limited until you provide proof of insurance, and you may be required to obtain an SR-22 Certificate of Financial Responsibility to reinstate your license.

Additional options for auto insurance coverage in Michigan

Although Michigan drivers are only required to purchase liability, PIP and PPI insurance, many drivers choose to purchase optional insurance. While purchasing optional insurance will increase your car insurance premium, you will receive more protection. Here are some of the most common additional insurance policies available to Michigan drivers:

• Comprehensive insurance: Collision insurance pays to repair damage to your vehicle after a covered accident with another vehicle or an immovable object such as a light pole where you were at fault. It also covers rollover accidents and damage from potholes. Collision insurance does not pay to repair another driver’s car if you cause an accident. If you make a claim, you will have a collision deductible.
• Fully comprehensive insurance: Comprehensive coverage pays for repairs to damage to your vehicle after non-accidental accidents, such as floods and falling objects. This coverage also covers vehicle theft, vandalism, fire, and cracked windshields. Comprehensive coverage also has an excess.
• Insurance for uninsured/underinsured drivers: Uninsured and underinsured motorist coverage pays for injuries and vehicle damage if you are involved in an accident with a driver who is uninsured or does not have enough insurance to cover the losses.
• Remaining liability for personal injury: If you are involved in an accident that seriously injures another person and leaves permanent damage even after they heal, residual bodily injury liability (RBI) insurance provides protection to cover the medical costs resulting from the accident.

frequently asked Questions

• What is the best car insurance in Michigan?

  Many auto insurance companies offer coverage in Michigan, including national and regional options, and each has its own strengths and weaknesses. According to our review, the best auto insurance companies in Michigan right now include Geico, USAA, Progressive, Auto-Owners, and Travelers Insurance. However, the best way to find the best auto insurance for you is to request quotes from multiple companies for the same type and amount of coverage and compare them.

• How much does car insurance cost in Michigan?

  In Michigan, the average premium for full coverage insurance is $2,887 per year (as of July 2024). Minimum coverage in the state typically costs $872 per year. For comparison, the average U.S. premium is $2,278 per year for full coverage and $621 per year for minimum coverage.

• What is the cheapest car insurance in Michigan?

  Most drivers look for a cheap rate when purchasing insurance in Michigan. Although Michigan car insurance is more expensive than average, there are providers known for offering cheaper rates. Michigan drivers looking for cheap insurance should shop around and get quotes from multiple providers to compare coverage rates and find an option that best fits their budget.

• Do Michigan car insurance laws and requirements apply when leasing or borrowing a car?

  Yes, Michigan’s car insurance laws and requirements apply when you lease or borrow a car. If the person you’re borrowing the car from lives in Michigan, they should already have the minimum insurance required. If they don’t, consider borrowing someone else’s car.

  If you don’t own your own car but are borrowing one from a friend or family member for an extended period of time, you may want to consider purchasing non-owner car insurance, which provides liability protection in the event of an accident. However, if you live with the person whose car you are borrowing, a better solution is to be on their policy (and this may be required).

  If you lease a car, you will likely be required to purchase comprehensive insurance to protect your lessor’s claims on the vehicle.