What Car Insurance Do I Need in Michigan?
The are several types of mandatory No-Fault coverage that you must have by law
Michigan’s No-Fault insurance law requires that, under certain circumstances, you must purchase a car insurance policy for your vehicle that provides the following four types of coverage:
- Personal Injury Protection (PIP): This coverage provides what are commonly known as “No-Fault PIP Benefits.” If you’re seriously injured in an auto accident, No-Fault PIP benefits provide reimbursement for medical expenses, a percentage of your lost wages, attendant care (in-home nursing services) and replacement services (help with household duties).
- Property Protection Insurance (PPI): This covers damage you cause to parked cars or other property (i.e. buildings, fences, trees, lawns, etc.) within the state of Michigan. Every Michigan auto policy has a mandatory $1 Million of PPI coverage.
- Residual Bodily Injury Liability (BI): Protects you in the event you cause an auto accident that resulted in serious injuries to someone else. The law requires a minimum of $20,000 of BI coverage per person and $40,000 per accident. However, our attorneys recommend that you never carry less than $500,000 per person and $1,000,000 per accident to fully protect yourself. The difference is usually only a few dollars more.
- Property Damage (PD): This coverage protects you in the event you cause damage to another person’s vehicle outside the state of Michigan. The law requires a minimum of $10,000 of PD coverage. However, our attorneys recommend that you carry a minimum of $100,000. For example, if you travel to Ohio, which is a tort state (Michigan is a No-Fault state) and you cause a crash, you would be responsible for all of the other driver’s car damage.
Determining whether you must buy mandatory No-Fault insurance
As the owner and operator of your car or truck, you have a duty to buy mandatory No-Fault insurance if either of the following two circumstances exist:
- When your “motor vehicle” is “required to be registered” in Michigan. (MCL 500.3101(1))
- When you plan on driving or moving your “motor vehicle … upon a highway.” (MCL 500.3101(1))
Registration consists of getting license plates and a registration certificate from the Michigan Secretary of State.
There are serious penalties if you do not carry Michigan No-Fault insurance, and you leave yourself vulnerable if you’re injured in an accident and you’re uninsured. Read about the penalties for driving uninsured here.
What if I’m leasing or borrowing a car?
The mandatory No-Fault insurance requirement applies even if you are not a car or truck’s “owner” in a conventional sense, such as if you’re just leasing the car or truck or borrowing it for an extended period of time (which will or could possibly exceed 30 days).
Michigan’s No-Fault insurance law says a person is a motor vehicle owner if:
- He or she rents or leases a motor vehicle for more than 30 days. (MCL 500.3101(3)(I))
- He or she holds legal title to the motor vehicle, except when he or she is in the business of leasing the motor vehicle and has leased it out for more than 30 days. (MCL 500.3101(3)(I))
- He or she has the “immediate right” under an installment sale contract to possess the motor vehicle. (MCL 500.3101(3)(I))
Optional insurance coverage
There are also several types of optional insurance coverage you can purchase. Click here for a list of the optional insurance coverages you can purchase in Michigan.