Auto Insurance Requirements In Michigan: What You Need To Know

Michigan is a no-fault insurance state, which means that your insurance provider will reimburse you for hospital expenses, lost wages, and funeral costs in the event of a car accident, regardless of who is at fault. In Michigan, car insurance is mandatory and there are several types of no-fault coverage that are required by law. The minimum amount of auto insurance coverage in Michigan is $50,000 per person, $100,000 per incident, and $10,000 for property damage.

Personal Injury Protection (PIP)

In Michigan, Personal Injury Protection (PIP) is a mandatory part of a driver's auto No-Fault insurance coverage. It is required for all drivers in the state and offers important financial protection in the event of a car accident, regardless of who is at fault.

PIP insurance covers a driver's medical expenses and lost wages after a car accident. This includes doctor visits, hospital stays, surgeries, rehabilitation, and prescription medications. PIP will also cover any necessary vehicle or home modifications, such as wheelchair accessibility or ramps, if the driver's injuries require them.

In addition, PIP provides reimbursement for transportation costs incurred while seeking medical treatment, as well as lost wages for up to three years or until the driver returns to work, whichever comes first. There is a monthly maximum for wage loss benefits, and payments reflect 85% of the driver's wages.

PIP also offers replacement services benefits, which cover the cost of everyday tasks that the driver can no longer perform due to their injuries, such as housekeeping, laundry, and grocery shopping. This benefit provides up to $20 per day during the first year after the accident.

Finally, PIP can provide attendant care or nursing services to help with activities of daily living. This can be provided in the driver's home or in a residential facility, by a family member or a professional caregiver.

While Michigan previously required unlimited PIP coverage, drivers can now choose their desired level of PIP coverage. The available options include unlimited coverage, $500,000, $250,000, and $50,000 caps on medical expenses, as well as the ability to opt out for those on Medicare.

Property Protection Insurance (PPI)

PPI provides protection if you cause damage to properly parked vehicles or fixed properties such as buildings, lampposts, fences, or trees within the state of Michigan. It is important to note that PPI does not cover damage to another vehicle unless it was safely parked and unoccupied. It also does not cover damage to utility transmission poles, lines, wires, or cables arising from the failure of a municipality, utility company, or cable television company.

The minimum insurance limit for PPI in Michigan is $1 million. This means that in the event of a covered accident, your PPI coverage will pay up to $1 million for damage caused to other people's property. It is worth noting that PPI does not cover property damage arising from motor vehicle accidents occurring outside of Michigan.

In terms of filing a PPI insurance claim, the owner of the damaged property will file a claim with the auto insurance company of the owner of the car that caused the accident. If recovery cannot be made, the claim can be filed with the insurer of the driver of the vehicle involved. There is a time limit for filing a PPI insurance claim; a property owner must file the claim within one year of the accident.

The total amount that PPI will cover depends on factors such as repair costs, replacement costs, and loss of use. The payout will not exceed $1 million. If the driver of the vehicle is at fault and the damage exceeds $1 million, the property owner may be able to sue the driver for "tort liability" for damages up to $4 million when "liability insurance required by federal statute or regulation is in effect".

Bodily Injury Liability (BI)

In Michigan, vehicle owners are required to carry No-Fault auto insurance that covers personal injuries, property damage, and liability for bodily injury. This means that if you're in an accident, your insurance will cover your medical expenses, lost wages, and legal liability if you injure someone else.

In Michigan, the minimum bodily injury liability coverage limits are $250,000 per person and $500,000 per accident. However, drivers can choose lower limits of $50,000 and $100,000. It's important to have sufficient coverage to protect yourself financially in the event of an accident.

BI coverage is essential because it can help you cover the costs associated with injuring someone else in an accident. It can also protect your assets if you are sued. While it is not required in every state, it is required in most states, including Michigan.

When choosing a BI policy, it's important to consider the liability limits. These limits are typically represented as three numbers, such as "100/300/100." The first number refers to the maximum amount that the insurance company will pay per person for bodily injuries, while the second number refers to the maximum amount they will pay per accident. The third number represents the property damage liability coverage.

It's recommended to have higher liability limits to ensure that you have enough coverage in the event of a severe accident. Experts suggest having bodily injury limits of at least $100,0000/$300,000. You may also want to consider purchasing an umbrella policy, which provides additional coverage if you reach your liability limits.

Property Damage (PD)

Michigan is a no-fault insurance state, which means that in the event of a car accident, no-fault insurance will reimburse you for hospital or medical expenses, wage losses from an inability to work, and funeral costs, regardless of who is responsible for the accident. However, it does not cover any damage to your car.

Under Michigan law, every driver must maintain a minimum of $10,000 of property damage car insurance coverage that can be applied to damages arising from an out-of-state car accident caused by the driver. However, this minimum coverage may be inadequate in the case of a severe accident. For instance, if a driver is responsible for totalling someone’s $50,000 car outside of Michigan, their property damage insurance would only cover the first $10,000 of damage, leaving them responsible for the remaining $40,000. Therefore, it is recommended that drivers carry a minimum of $100,000 of property damage car insurance coverage, which is fairly inexpensive.

It is important to note that property damage car insurance coverage does not apply to vehicle damages arising from a crash that occurs within the State of Michigan. When a driver causes an accident resulting in vehicle damage within Michigan, the owner of the damaged vehicle has three options for getting their damage repair costs paid:

• File a claim under their own collision insurance policy
• File a mini tort lawsuit in small claims court against the at-fault driver for damages up to $3,000 that are not or could not be covered by collision insurance
• Pay out-of-pocket for the vehicle damage repairs

Property damage insurance is distinct from property protection insurance (PPI). PPI is a mandatory component of auto insurance in Michigan and provides up to $1 million in coverage for damage a vehicle does to other people's property within the state, such as buildings, fences, and other people’s properly parked vehicles.

Uninsured/Underinsured Motorist Coverage

UMC/UIM coverage typically consists of two components: uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD). UMBI covers medical bills for you and your passengers, while UMPD covers damage to your vehicle. In some states, you may also have the option to purchase underinsured motorist property damage (UIMPD) and underinsured motorist bodily injury (UIMBI) coverage, which covers the difference between your total damages and the at-fault driver's policy limit.

In California, for example, UMC/UIM coverage is automatically included in your auto insurance policy unless you waive it in writing. The default coverage offered is typically $30,000 for bodily injury per person, $60,000 for total bodily injury per accident, and $3,500 for property damage. However, you have the option to purchase a minimum policy with lower coverage limits.

UMC/UIM coverage is essential because it ensures that you can collect damages for medical costs, lost wages, car repair bills, pain and suffering, and other losses resulting from an accident with an uninsured or underinsured driver. It also helps to take the burden off private health insurers and government programs, which may not cover all your expenses.

When deciding how much UMC/UIM coverage to purchase, it is recommended to buy as much as you can afford. A policy with higher coverage limits will provide more comprehensive protection in the event of an accident. Additionally, it is important to review the specific laws and requirements for UMC/UIM coverage in your state, as they may vary.

Frequently asked questions