Full Auto Insurance Coverage: Michigan's Unique Requirements Explained

In Michigan, full-coverage auto insurance is more expensive than minimum coverage but can prevent financial disaster in the event of a major accident. Full coverage includes the state's minimum requirements of $50,000 in bodily injury coverage per person and $100,000 per accident, as well as $10,000 in property damage coverage. It also includes personal injury protection and property protection insurance. Collision and comprehensive insurance are typically included in full coverage, covering repairs or replacement costs for your car in an accident or damage caused by something other than a collision, such as theft or vandalism.

Minimum insurance requirements

In Michigan, drivers are legally required to carry car insurance and purchase coverage before registering their vehicle. The state has specific minimum insurance requirements that drivers must meet. These requirements include different types of liability coverage, such as property damage and bodily injury.

The minimum amount of Michigan auto insurance coverage is $50,000 for individual bodily injury liability, with a total of $100,000 per accident. Additionally, there is a requirement for property damage liability coverage of $10,000 for accidents occurring outside of Michigan. This coverage protects drivers in the event they cause damage to another person's vehicle outside the state.

Another crucial component of the minimum insurance requirements in Michigan is property protection insurance (PPI). Every Michigan auto policy includes a mandatory $1 million of PPI coverage. This insurance covers damage caused to another person's property, such as buildings, fences, and parked vehicles, within the state of Michigan.

Personal injury protection (PIP) is also mandatory in Michigan. This coverage reimburses a portion of wage loss, medical expenses, and essential services incurred as a result of an accident. It provides what are known as "No-Fault PIP Benefits," ensuring that injured parties can access the necessary financial support regardless of who is at fault for the accident.

It is important to note that Michigan is a no-fault insurance state, which means that in the event of an accident, each driver's insurance will cover their own medical expenses and losses, regardless of who is at fault. This system aims to streamline the process and provide prompt reimbursement for those involved.

While these are the minimum insurance requirements in Michigan, it is recommended to consider purchasing additional coverage to ensure comprehensive protection. Full coverage auto insurance in Michigan typically includes collision and comprehensive insurance, providing further financial security in the event of a major accident.

Liability coverage

As a resident of Michigan, your insurance policy must include two types of liability coverage: property damage and bodily injury.

Property Damage Liability Coverage

Property damage liability coverage safeguards your assets if you are found legally responsible for a covered accident. It covers damage you may cause to the property or vehicle of another party. The minimum amount of property damage liability coverage required in Michigan is $10,000. However, attorneys recommend carrying a minimum of $100,000. This is especially important if you travel to a tort state, where you would be responsible for the other driver's car damage in the event of an accident.

Bodily Injury Liability Coverage

Bodily injury liability coverage safeguards your assets if you are found legally responsible for a covered accident and includes certain expenses associated with bodily harm sustained by the other parties. The minimum amount of bodily injury liability coverage required in Michigan is $50,000 per person, with a total maximum of $100,000 per incident.

Additionally, Michigan's new auto insurance law has increased the default coverage limits for residual bodily injury liability coverage. These limits are now:

• Up to $250,000 for a person who is hurt or killed in an accident.
• Up to $500,000 for each accident if several people are hurt or killed.
• Up to $10,000 for property damage in another state.

Drivers may also have the option to purchase other bodily injury/property damage coverage limits. The lowest limit they may purchase is:

• Up to $50,000 for a person who is hurt or killed in an accident.
• Up to $100,000 for each accident if several people are hurt or killed.
• Up to $10,000 for property damage in another state.

Personal Injury Protection (PIP)

While not a type of liability coverage, it is important to note that Michigan law also requires personal injury protection (PIP) insurance. PIP covers medical expenses, a percentage of lost wages, attendant care (in-home nursing services), and replacement services (help with household duties) for you and your passengers after an accident, regardless of who is at fault. The minimum amount of PIP coverage required in Michigan is unlimited per person.

Property protection insurance

PPI insurance covers accidental damage to tangible property, such as safely parked cars, buildings, fences, trees, and lawns. It is important to note that PPI will not cover damage to vehicles, their contents, or trailers if they are parked in a manner that creates an unreasonable risk of damage. Additionally, it does not cover property damage to utility transmission lines, wires, or cables arising from the failure of a municipality, utility company, or cable television company.

In terms of coverage limits, PPI insurance provides a mandatory $1 million in coverage. This means that the insurance will cover the lesser of reasonable repair costs or replacement costs less depreciation, up to a maximum of $1 million. If the driver at fault has insufficient coverage, the property owner may be able to sue for tort liability for damages in excess of the $1 million limit, up to $4 million.

The process of making a PPI insurance claim involves the owner of the damaged property filing a claim with the auto insurance company of the owner of the vehicle involved in the accident. If recovery cannot be made, the claim can be filed with the insurer of the driver of the vehicle. It is important to note that there is a time limit for filing a PPI insurance claim, as a property owner cannot sue beyond one year after the accident.

Personal injury protection

PIP covers medical expenses, including doctor visits, hospitalizations, surgeries, procedures, and prescription medications. It also covers attendant care, or nursing services, which help individuals with activities of daily living that they are unable to do independently due to their injuries. This can include monitoring, supervision, administering medication, bathing, dressing, and ambulation assistance. PIP also covers medical mileage, reimbursing individuals for transportation costs incurred while seeking medical treatment.

In addition to medical benefits, PIP provides reimbursement for lost wages due to an individual's inability to work as a result of their injuries. It also covers replacement services, which include the cost of hiring someone to perform household tasks that the injured person would typically do themselves, such as housework, cooking, laundry, and running errands.

Michigan offers several PIP coverage levels, including $50,000, $250,000, $500,000, and an unlimited option. Individuals can choose the coverage level that best suits their needs and budget. However, it is important to consider the potential costs of medical care and treatment when selecting a coverage level. If the selected coverage level is reached, the financial burden of paying for additional medical expenses may fall on the individual.

Optional Michigan insurance coverage

In addition to the required no-fault insurance, there are several types of optional auto insurance coverage that you can purchase in Michigan. These include:

• Collision and Comprehensive Insurance: Collision coverage pays for repairs to your car when it is damaged in a crash. There are three types of collision insurance: limited, standard, and broad form. Comprehensive insurance covers your car if it is stolen or needs repairs due to events unrelated to a collision, such as fire, vandalism, glass damage, or contact with animals.
• Limited Property Damage Liability Insurance ("Mini-Tort"): Under this coverage, if you are 50% or more at fault in an accident and the damages to the other driver's car exceed their insurance coverage, you may be sued and held liable for up to $1,000 in damages. Conversely, if the other driver is 50% or more at fault, you may sue them for damages to your car that are not covered by your insurance.
• Towing and Rental Car Coverage: This coverage generally includes or reimburses the cost of towing and/or a rental car in the event of an accident, breakdown, or flat tire.
• Uninsured and Underinsured Motorists Coverage: This coverage will pay out if an uninsured or underinsured motorist injures you or a member of your household, and you are awarded a settlement from the at-fault driver.

Additionally, you can tailor your policy with options like accident forgiveness, roadside assistance, and loss of use/rental car expense coverage.

Frequently asked questions