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Michigan Minimum Car Insurance Requirements, Penalties and Other Auto Insurance Laws
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What Is the Minimum Car Insurance Requirement in Michigan?
Michigan car insurance requirements require every car owner to have certain minimum coverages to register and legally drive a car in the state. How much car insurance do you need in Michigan to comply with the state laws? Here are the basic coverage limits you need to have.
- $20,000 per person bodily injury coverage
- $40,000 per accident bodily injury coverage
- $10,000 for property damage
- No-limit personal injury protection (PIP)
- $1 million per accident for property protection insurance (PPI)
The coverage limits stipulated by the state’s insurance regulations are only basic protections needed to comply with Michigan law. Drivers can opt to increase their coverage limits when purchasing car insurance to ensure that they are sufficiently protected in the event of an accident.
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What Does This Minimum Coverage Mean?
The insurance laws in Michigan require three basic coverages. The first coverage is 20/40/10 liability coverage which covers bodily injury to other parties and damage to other people’s property in case of an accident. The limits set by the Michigan insurance laws for bodily injury coverage are $20,000 and $40,000 per person and per accident, respectively. The minimum coverage limit for property damage is $10,000.
The second part of the basic coverages required is personal injury protection (PIP). PIP coverage in Michigan has no limit and will cover you for the medical expenses you incur following an accident. PIP will also reimburse you for lost wages for up to three years if the accident leaves you unable to work.
The third basic coverage required by Michigan insurance laws is property protection insurance (PPI) which covers any damage that your car causes to other people’s property up to a limit of $1 million.
How Much Does the Minimum Car Insurance Cost in Michigan?
Car insurance costs in Michigan depend on various factors, including your location, age, driving history, credit score and more. It is also important to note that rates typically vary from insurer to insurer.
USAA is the cheapest average option for car insurance in Michigan at $889 per year, but only former and current military members and their families can apply for this policy. At an average of $977 per year, Nationwide is the second most affordable option for car insurance in Michigan.
These prices are only estimates based on rates for an average Michigan driver and should not be used to compare insurance prices.
Car insurance costs obtained by MoneyGeek are based on the minimum 20/40/10 coverage limits set by the state of Michigan and unlimited PIP coverage. The base profile in this analysis is for a 40-year-old male Michigan resident driving a 2010 Toyota Camry with a clean driving record and good credit score.
If you're instead looking for a policy that balances quality with affordability, MoneyGeek also ranked the top car insurance companies in Michigan.
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What Is the Minimum Car Insurance Requirement in Michigan While Leasing a Car?
When leasing a car in Michigan, the leasing company you use may have its own minimum car insurance requirements that are not necessarily the same as the state requirements. Most leasing companies will require you to have a full coverage car insurance policy with at least 100/300/50 coverage limits. However, these requirements can vary depending on the leasing company. Contact your financial leasing company to find out what their specific minimum car insurance requirements are.
Michigan, at 25.5%, had the second-highest percentage of uninsured motorists (UM) in the nation in 2019. This means that drivers in the state have a high risk of getting involved in an accident with an uninsured motorist. In such cases, the basic coverage stipulated by Michigan insurance laws may not offer sufficient protection. MoneyGeek recommends that drivers in Michigan get a full coverage policy with at least 50/100/50 coverage limits to obtain sufficient protection.
Penalties for Driving Without Car Insurance in Michigan
In Michigan, driving without car insurance is illegal. Michigan has some harsh penalties for people caught driving without valid car insurance, including:
- Fine of $200–500: Driving without insurance in Michigan attracts a fine of at least $200 and not more than $500.
- Jail time for up to one year: The penalty for driving without insurance in Michigan can include jail time of up to one year in addition to or in lieu of the fine.
- Suspension of your driver’s license: Your driver’s license will be suspended until you obtain the mandatory car insurance as stipulated by Michigan car insurance laws. The state has the right to suspend your license for up to 30 days. If you purchase insurance within the 30-day timeframe, you can pay a $125 reinstatement fee to have your license reinstated.
- You cannot renew, transfer, replace or purchase new car registration: You will need to provide proof of valid car insurance to renew, transfer or register your car in Michigan.
- You cannot sue the at-fault driver: If you get into an accident in Michigan and you are driving without insurance, you cannot sue the other party even if they are at fault.
Frequently Asked Questions About Car Insurance in Michigan
To help you understand Michigan car insurance laws, here are the answers to the most commonly asked questions about car insurance in Michigan.
Yes, car insurance is required in Michigan to drive a vehicle in the state legally. Michigan insurance laws require drivers to have 20/40/10 liability coverage, along with PIP and PPI coverages.
Yes, to register a car in Michigan, you must provide proof of insurance that meets the state’s car insurance regulations. You will not be able to register a car in Michigan without a Michigan no-fault insurance policy. Out-of-state policies are not accepted.
Basic car insurance in Michigan is a no-fault insurance policy that includes liability coverage of 20/40/10, which means a $20,000 bodily injury limit per person, a $40,000 bodily injury limit per accident and a minimum limit of $10,000 for property damage. Michigan laws also require unlimited PIP coverage and at least $1 million coverage for property protection insurance.
Car insurance usually follows the car in Michigan. This means that the liability insurance on your car will cover damage to other people’s property and their medical expenses regardless of whether you are the one driving the car. However, the PIP coverage in your car insurance policy follows the driver. It will cover medical expenses and wages if the insured person is driving the vehicle at the time of the accident.
Yes, you can get car insurance in Michigan without a license, but you will need to provide details of a licensed person as the primary driver. Michigan insurance laws state that you are eligible for car insurance if you have a car that is already registered, want to register a car or hold a valid Michigan driver's license.
Yes, Michigan is a no-fault state for car insurance. This means that in case of an accident, regardless of whether or not you are at fault, your PIP insurance will pay for any medical expenses incurred as a result of the accident. You will also be compensated for lost wages and other direct expenses incurred due to the accident.
Yes, PIP coverage is required in Michigan in addition to the liability coverage required by the state. PIP coverage refers to personal injury protection and covers you for any medical expenses and lost wages that you incur due to an accident. Michigan’s mandatory no-fault insurance policy has unlimited PIP coverage.
No, Michigan does not require drivers to have uninsured motorist insurance, which protects you if you get into an accident with a driver who is underinsured or not insured at all. In Michigan, you don’t need to have UM insurance, but you can choose to have it as optional coverage.
Yes, Michigan allows for diminished value compensation after an accident. Since Michigan is a diminished value state, you can claim compensation for the diminished value of your car after an accident, but the statute of limitations is three years. You will only be eligible for diminished value compensation in Michigan if you were not at fault for the accident.
Car insurance requirements in Michigan change after a DUI conviction to include a mandatory SR–22 insurance policy for three years. In Michigan, a DUI conviction will cause you to pay higher premiums for your car insurance. You will also need to hold an SR-22 car insurance policy as proof that you have insurance that meets Michigan’s minimum insurance requirements.
A CARCO inspection is a vehicle photo inspection that documents the existence of the car, its mileage and its physical condition. These details are used to protect both the insurance company and the owner of the vehicle. Michigan does not require drivers to have a CARCO inspection.
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sources
- Collision Claims. "Michigan Diminished Value Claims." Accessed July 13, 2021.
- Insurance Information Institute. "2020 Insurance Factbook." Accessed July 11, 2021.
- Insurance Information Institute. "Background on: Compulsory Auto/Uninsured Motorists." Accessed July 13, 2021.
- Insurance Information Institute. "Facts + Statistics: Uninsured motorists." Accessed July 11, 2021.
- Kelley Blue Book. "Penalties for Driving Without Car Insurance by State." Accessed July 13, 2021.
- Michigan.gov. "Substance Abuse and Driving." Accessed July 13, 2021.
- Michigan.gov. "Your Guide to Automobile Insurance." Accessed July 13, 2021.