The state of Michigan requires that all drivers carry no-fault auto insurance, or “financial responsibility,” to help cover the cost of damages and injuries related to an auto accident.
The minimum financial responsibility requirements for drivers in Michigan are structured differently than most other states. These are the types of insurance you will need, and an explanation of the required minimums:
Personal Injury Protection, or PIP, insurance is required to cover your own medical expenses. The required minimum amount changes annually, and is often coordinated with your health insurance so that each driver pays a portion of medical bills.
Property Protection insurance is required to pay for damages to other people’s property that was not a part of the accident, such as buildings or road signs. The minimum required coverage is $1,000,000.
Additionally, Residual Bodily Injury and Property Damage Liability insurance, or BI/PI, is required in the circumstances listed below:
You were at fault for a car accident that resulted in serious injury or death.
You are involved in an accident with someone who is not a resident of Michigan, and is driving a vehicle that is not registered in Michigan.
You are 50% or more at fault for an accident that causes damages to a car that goes beyond what their insurance covers.
In order to cover any of these circumstances, you must carry the following amounts in BI/PI liability insurance:
$20,000 for bodily injury or death per person; this means you will need to carry a total minimum of $40,000 to cover the lowest possible number of people who could be involved in an accident (the two drivers).
$10,000 for property damage that occurred to property registered in another state
$1,000 to cover uninsured damages to another car
Other types of insurance
While the liability insurance listed above is all that is required in Michigan, drivers may also elect to pay for further coverage. Michigan is a no-fault state, meaning that damages to your car may not be covered by the other party, regardless of who was at fault. There are three types of collision insurance that you may wish to consider in order to cover damages to your car in the event of an accident.
Limited Collision Coverage pays for all repairs on your vehicle after the deductible, if you are less than 50% at fault for a car accident.
Standard Collision Coverage pays for all repairs on your vehicle after the deductible.
Broad Form Collision Coverage pays for all repairs on your vehicle without a necessary deductible, if you are less than 50% at fault for the accident. If you are more than 50% at fault, your insurance company will pay for all repairs after the deductible.
If you fail to carry the proper insurance in Michigan, you may be subject to one of the following penalties:
Fines between $500 and $5,000, or a prison sentence of up to one year
Suspension of driver’s license or vehicle registration
If you do not have the required insurance card as proof of insurance, you can be charged a $25 fine, a $200 fee, a $500 fee, or a combination of the three, even if your car is actually insured.
For more information, or to renew your registration online, contact the Michigan Department of State through their website.