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Buying Car Insurance

Michigan Car Insurance Laws and Requirements

The are several types of mandatory No-Fault coverage that are required by Michigan law

The Michigan car insurance laws and requirements state that under certain circumstances, you must purchase a No-Fault insurance policy for your vehicle that provides the following four types of coverage:

  1. Personal Injury Protection (PIP): This Michigan car insurance law and requirement 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).
  2. Property Protection Insurance (PPI): This Michigan car insurance law and requirement 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.
  3. Residual Bodily Injury Liability (BI): This Michigan car insurance law and requirement 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.
  4. Property Damage (PD): This Michigan car insurance law and requirement 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 the required No-Fault insurance

As the owner and operator of your car or truck, you have a duty to buy the 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 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 Michigan car insurance laws and requirements apply 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 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))

Types of car insurance coverage

There are also several types of optional insurance coverage you can purchase. Click here for a full list of the different types of car insurance coverage (both mandatory and optional) drivers can purchase in Michigan.