Michigan Auto Insurance: Understanding The Requirements

Michigan is a no-fault insurance state, which means that if you get into a car accident, your insurance will reimburse you for hospital or medical expenses, wage losses, and funeral costs, regardless of who is responsible for the accident. However, it does not cover any damage to your car. Michigan law requires vehicle owners to carry No-Fault auto insurance that covers personal injuries, property damage, and liability for bodily injury. These coverages help pay for medical bills and lost wages, as well as legal liability if a driver injures another person or causes property damage. As a resident of Michigan, you are required to carry car insurance and purchase coverage before registering your vehicle.

Non-residents driving in Michigan

Non-residents of Michigan who drive their own vehicles in the state for more than 30 days per year are required to maintain a valid No-Fault auto insurance policy on their vehicle. This means that non-residents must purchase and maintain a No-Fault auto insurance policy issued by an insurer authorised to conduct insurance business in Michigan. Non-residents who fail to comply with this requirement are considered "uninsured" drivers and may face consequences such as jail time, fines, and denial of benefits and compensation in the event of a car crash.

To obtain the required Michigan No-Fault auto insurance, non-residents who plan to drive their own vehicle in the state for more than 30 days in a year must:

• Obtain the necessary form from the insurer.
• Complete it with details about their intended driving.
• Submit the form to the insurer.

It is important to note that non-residents are not required to register their vehicles in Michigan unless they operate their vehicles in the state for more than 90 consecutive days. Additionally, non-residents driving in Michigan with a valid driver's license issued by another country may be eligible to drive, depending on whether their license was issued by a "treaty country" or a "non-treaty country".

Drivers from treaty countries can legally drive in Michigan if their license is printed in English or accompanied by an English translation. Drivers from non-treaty countries must meet additional requirements, such as providing proof of legal presence and having a valid passport or visa. It is recommended that non-residents contact the Michigan Department of Insurance and Financial Services (DIFS) or seek legal advice to ensure they comply with all applicable laws and requirements when driving in Michigan.

Penalties for driving uninsured

In Michigan, driving without insurance is a misdemeanor, and drivers may face fines, suspended driving privileges, and jail time. Here are the penalties for driving without insurance in Michigan:

Fines

If you are convicted of driving without insurance in Michigan, you will be fined no less than $200 and no more than $500. The specific amount will depend on the circumstances of your case and the discretion of the court.

Jail time

Driving without insurance in Michigan can result in up to one year in jail. This punishment can be combined with a fine to create a more severe penalty for the offence.

License suspension

If you are caught driving without insurance, your driver's license will be suspended. To reinstate your license, you will have to pay a fee of at least $125.

Increased insurance premiums

Your insurance company may increase your premiums if you have a lapse in coverage. They may view you as a riskier client and charge you higher rates as a result.

Loss of legal rights

If you are in an accident while driving without insurance, you lose some of your legal rights. You will be unable to sue the at-fault driver for pain and suffering, and you will be disqualified from recovering No-Fault medical and wage loss benefits. This means you will have to pay for your own medical expenses and lost wages out of pocket.

Financial liability

If you are driving without insurance and cause an accident, you may be held financially liable for the other driver's medical bills, lost wages, and vehicle damage. This can result in significant financial burden and put your assets at risk.

SR-22 insurance requirement

Drivers who are involved in an accident while uninsured may be required to purchase SR-22 insurance. This is not an actual insurance policy but a certificate proving that you carry the state's minimum liability coverage. While filing an SR-22 is typically inexpensive, having it on your record can lead to an increase in your insurance rates.

No-fault insurance

Michigan is a No-Fault state for auto accidents. This means that, in the event of a car accident, it is the responsibility of the driver's own auto insurance company to cover the cost of any injuries or damage incurred, regardless of who was at fault. This is in contrast to a tort liability state, where the driver deemed responsible for the accident would have to pay for any damage or injuries caused.

The Michigan No-Fault Insurance law was designed to help people injured in car accidents. It ensures that car accident victims get the help they need promptly and without regard to fault. The law covers personal injuries, property damage, and liability for bodily injury. This includes reimbursement for medical expenses, a percentage of lost wages, attendant care, and replacement services (help with household duties).

There are several types of mandatory No-Fault coverage that are required by Michigan law. These include Personal Injury Protection (PIP), Property Protection Insurance (PPI), and Residual Bodily Injury Liability (BI). PIP provides what are commonly known as “No-Fault PIP Benefits” and covers medical expenses, lost wages, attendant care, and replacement services. PPI covers damage to tangible property such as parked cars, buildings, fences, trees, and lawns within the state of Michigan. Every Michigan auto policy has a mandatory $1 million of PPI coverage. BI protects drivers in the event that they cause an auto accident that results in serious injuries to someone else.

There are serious penalties for not carrying No-Fault insurance in Michigan, including possible jail time and fines. Driving without insurance in Michigan is punishable as a misdemeanor with a fine of up to $500 and up to one year in jail. Additionally, those without insurance are left vulnerable if they are injured in an accident, as they may be personally responsible for their medical costs.

Minimum insurance requirements

Michigan's auto insurance law requires vehicle owners to carry No-Fault auto insurance. This includes several types of mandatory coverage.

Personal Injury Protection (PIP)

PIP pays all reasonable and necessary medical expenses for your lifetime if you are hurt in an auto accident. It also covers wage loss and replacement services for up to three years after the accident. The new law allows you to choose your PIP medical limit, with options of $500,000, $250,000, or $50,000 per person per accident.

Property Protection Insurance (PPI)

PPI covers damage to other people's property, such as buildings and fences, and other people's parked vehicles. It is mandatory to have $1 million of PPI coverage.

Residual Bodily Injury and Property Damage Liability (BI/PD)

BI/PD covers your defense costs and any damages you are liable for as a result of an auto accident in which someone was killed or seriously injured. The minimum coverage limits are:

• $20,000 per person who is hurt or killed in an accident
• $40,000 for each accident if several people are hurt or killed
• $10,000 for property damage in another state

These minimum limits are often referred to as 20/40/10. You can also purchase higher limits of BI/PD coverage.

Optional insurance coverage

Michigan residents are required to carry car insurance and purchase coverage before registering their vehicle. The state's auto insurance laws changed in 2019, and Michigan became a no-fault insurance state. This means that in the event of a car accident, no-fault insurance will reimburse you for hospital or medical expenses, wage losses, and funeral costs, regardless of who is responsible for the accident.

There are several types of mandatory No-Fault coverage that are required by Michigan car insurance laws. These include Personal Injury Protection (PIP), Property Protection Insurance (PPI), Residual Bodily Injury Liability (BI), and Property Damage (PD).

In addition to these mandatory coverages, there are also several types of optional insurance coverage that Michigan drivers can purchase. Here is a detailed list of the optional coverages available:

• Collision Coverage: This type of coverage is used to repair your vehicle when physical damage occurs from non-collision-related incidents (subject to deductible). Such incidents can include theft, fire, vandalism, glass breakage, and contact with animals. Collision coverage comes in three levels: Broad, Standard, and Limited.
• Comprehensive Coverage: This covers damage to your vehicle from incidents such as theft, fire, and glass damage that are unrelated to a collision.
• Uninsured/Underinsured Motorist Coverage: This type of coverage protects you in the event of an accident where the other party is at fault and doesn't have insurance or has inadequate coverage. It includes both bodily injury and property damage protection.
• Mini Tort Coverage: Also called Limited Property Damage, this covers up to a certain amount of damage to a motor vehicle that is not otherwise covered by insurance. The maximum recovery amount for accidents occurring after July 1, 2020, is $3,000.
• Gap Coverage: This covers the difference in value between what a car is worth and what is owed on it.
• Accidental Death Coverage: This is essentially life insurance that covers you or your passengers in the event of a fatal accident.
• Accident Forgiveness: With this coverage, your insurance provider will not raise your rates following your first at-fault accident.
• Roadside Assistance: This coverage provides assistance in the event of a breakdown or other issues, such as fuel delivery, lockout service, and jump-starts. It is typically offered at different levels, such as Basic and Plus.
• Loss of Use/Rental Car Expense: If your car is unusable due to a covered loss, this coverage helps pay for a rental car or other transportation expenses.

Frequently asked questions