All 50 U.S. states require drivers to carry auto insurance, but the amount of required coverage varies from state to state. Michigan uses a no-fault system of auto insurance, which is designed to cover the costs associated with injuries and medical expenses for up to 3 years following an accident.

Minimum Required Insurance Coverage in Michigan

BIL (Bodily Injury Liability): Liability coverage for injuries/deaths in the other vehicle

• Minimum of $20,000 for one person
• Minimum of $40,000 for the other driver and all passengers

PDL (Property Damage Liability): Liability coverage for damage to the other driver’s vehicle or property, and other public or private property surrounding the accident scene

• Minimum of $10,000 for all property damage

PPI (Property Protection Insurance): Liability coverage for property damage (other than damage to the other vehicle involved in the accident) resulting from an accident caused by you, applying to whatever amount is not covered by PDL insurance

• Minimum of $1,000,000

PIP (Personal Injury Protection): Coverage for injuries to yourself and your passengers if you cause an accident

• Pays medical expenses and lost wages for up to 3 years following an accident, maximum benefit is determined by your specific policy

No-Fault Insurance System

Michigan uses a no-fault insurance system, which means that an individual’s own insurance covers his/her injuries following an accident, regardless of who was at fault for the accident. However, property damage costs are the responsibility of whoever is at fault for an accident. The no-fault system also prevents insured drivers from being sued for damages following an accident (except in certain circumstances). However, you are still entitled to seek legal recourse if you are in an accident caused by an uninsured driver.

Under the no-fault system, as an insured driver you may still be sued if:

• You cause an accident involving death, severe injury, or permanent disfigurement of another person
• You cause an accident with a non-Michigan resident driver
• You cause an accident outside of Michigan
• You cause an accident in which the damages to the other vehicle are not covered by your insurance (up to $500)

About Liability Insurance

Liability insurance is designed to cover medical and property damage expenses for the other driver and his/her passengers if you cause an accident. It does not, however, cover your own injuries or property damage expenses. If you want to be covered for damage to your own vehicle resulting from an accident caused by you, you must purchase collision coverage. If you are involved in an accident that is the other driver’s fault, his/her liability insurance will cover your property damage expenses. Michigan does not require drivers to carry UMC (Uninsured/Underinsured Motorist Coverage), but if you are in an accident caused by an uninsured driver and you do not carry UMC, you will be responsible for all the associated costs. You are entitled to bring a lawsuit in order to recoup your expenses, but your insurance company will only cover these costs if you have purchased UMC.

About Personal Injury Protection

In Michigan, drivers are required to carry personal injury protection coverage (PIP). Because your existing health insurance plan may cover the same injuries, you are permitted to coordinate your health insurance plan with your PIP coverage to obtain lower auto insurance premiums. The state merely requires that your total coverage allows for up to 3 years of medical expenses resulting from an auto accident, but does not stipulate from which insurance provider this coverage must originate. However, be aware that your health insurance will only cover the injuries of individuals listed on your plan, whereas PIP covers anyone riding in your vehicle.

In Michigan, PIP applies to all family members living in your household, even if they are riding in another person’s car or are involved in an accident as a pedestrian.

Additional Insurance Options

While not required by the state of Michigan, you may choose to purchase additional coverage to protect yourself in all accidents. If you have a loan, lease, or lien on your vehicle, you may be required to carry more comprehensive insurance than what is required by the state.

• Collision Coverage: Covers damages to your vehicle or property if you cause an accident; there are various levels of collision coverage so you should check with your provider before selecting a plan
• Comprehensive Coverage: Covers damages to your vehicle caused by factors other than a traffic accident, such as fire, flood, vandalism, theft, or collision with an animal

State-Issued Proof of Insurance

All Michigan drivers are required to carry proof of insurance in their vehicles at all times. If you are involved in an accident or a traffic stop, you will be asked to provide proof of insurance. Failure to do so may result in fines of $200-500 and even prison time.