Michigan car insurance laws
Michigan car insurance laws state clearly that drivers in the Great Lake State must have a certain amount of car insurance to drive legally on public roads. Failure to do so can lead to fines and other penalties—and may impact your insurance premium as well. Michigan’s auto insurance requirements are among the most robust in the country, but recent laws have been passed to help decrease the rate you pay. In this guide, Bankrate’s insurance editorial team explains the coverage types you need, and how to find the best and most affordable coverage for your situation.
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 and face substantial fines and potentially jail time.
- 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 financial protection following an at-fault accident. Those who choose less than this amount will need to sign a waiver approved by the Director of Insurance and Financial Services.
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Minimum insurance requirements in Michigan
Michigan has minimum requirements for bodily injury and property damage liability. These coverage options help financially protect the other car and its passengers 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 auto 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 financially in a serious accident.
No-fault insurance coverage requirements in Michigan
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 recover all costs of the accident you incurred from the at-fault party’s insurer via a process called subrogation.
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 type of insurance that is part of a no-fault policy in Michigan 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 certificate of financial responsibility 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 at-fault accident with another vehicle or a stationary object like a light pole. It also covers rollover accidents and pothole damage. 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, vandalism, fire and cracked windshields. 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 and has a lasting impact after the initial healing, residual bodily injury liability (RBI) offers protection to cover medical expenses that result from the accident.
Frequently asked questions
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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.
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In Michigan, the average full coverage car insurance premium costs $2,887 per year (as of July 2024). Minimum coverage in the state typically costs $872 per year. By comparison, the United States average premium is $2,278 per year for full coverage and $621 per year for minimum coverage.
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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.
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Yes, Michigan car insurance laws and requirements apply when leasing or borrowing a car. If the person you are borrowing the car from lives in Michigan, they should have the minimum amount of required insurance already. If they do not, you may want to consider borrowing someone else’s car.
If you do not own a 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 coverage in the event of an accident. If you live with the person whose car you are borrowing, however, a better solution is to have yourself added to their policy (and may be required).
If you are leasing a car, you will likely be required to purchase full coverage car insurance, in order to protect your lessor’s interest in the vehicle.
