Featured Expert
Cathy Chase, JD
Cathy Chase, JD Advocates for Highway & Auto Safety View bio

This guide was written by

MoneyGeek Staff

Michigan is the home of the modern automobile. Henry Ford revolutionized automotive assembly and even invented a version of the Model-T that ran on biofuel — and up to this day, more cars are manufactured in Michigan than any other state. To drive as a resident of the state that started it all, you’ll need insurance. Read on find out what Michigan requires for car insurance and road safety.

Insurance Requirements for Michigan Vehicles

Summary

Michigan residents enjoy some of the best insurance protection in the country —assuming they actually buy it. If you or your family are injured in an accident, the personal injury protection required by law will entitle you to unlimited benefits for up to three years to cover medical expenses. But such peace of mind comes at a cost, and insurance in Michigan is significantly more expensive than in many other parts of the country. Perhaps because of sticker shock, more than one out of five Michigan motorists don’t have the required insurance, according to the Insurance Information Institute.

Who Needs Vehicle Insurance in Michigan?

If you’re planning on actually driving a car in Michigan, then it needs to be insured. If, on the other hand, you are storing an inoperable car in the garage, you can skip the registration and insurance process.

Proof of Insurance

In Michigan, proof of financial responsibility comes in the form of a certificate of insurance, which lists the car and the driver on the policy. It must be kept with the driver at all times. In late 2015, Michigan passed legislation allowing drivers to use electronic insurance information stored on their cell phone instead of a printed certificate. Drivers should show either version when:

Minimum Insurance Requirements in Michigan

Michigan is one of just 12 “no-fault” states, meaning drivers can receive benefits regardless of who was at fault in the accident. Not only that, but there’s no hard limit on how much your insurance company might have to pay to cover your costs. Here are the details of what a plan must include:

  • Personal injury protection (PIP), which pays for up to three years of “reasonable” medical expenses, no matter what the cost, as well as lost wages
  • Property protection insurance (PPI), which pays up to $1 million if your car damages others’ property, including buildings and parked cars
  • Residual liability insurance for injury and property damage in the amounts of $20,000 to cover bodily injury for an individual, $40,000 for multiple people, and $10,000 for property damage

No-fault insurance is meant to protect motorists from lawsuits, but there are certain circumstances where you may be sued. In such cases, liability insurance can cover legal costs and any damages the court determines you owe. People can sue you if:

  • You are at fault in an accident that causes traumatic injury or death
  • You are driving a car registered outside of Michigan
  • The accident takes place outside the state

For more information on types of coverage, see “How Much Vehicle Insurance Do You Need?” below.

Alternatives to Insurance in Michigan

If you don’t want to buy insurance, you have two other options:

  • Filing a bond with the secretary of state
  • Depositing money or securities with the state treasurer for an amount of his or her choosing

In such cases, the bond or the certificate of deposit work as proof of financial responsibility and must be carried like standard proof of insurance.

Although motorists may think opting out of insurance is a smart financial move, it is actually a risky one. Drivers not only leave themselves vulnerable to lawsuits and claims, but also must pay their own medical bills. At best, they may find themselves having to go back to work before they are physically ready. At worst, they could lose their savings and even their home.

What Happens If You Don’t Have Car Insurance in Michigan?

Michigan tracks compliance with electronic insurance reporting, which means insurers send policy information to the secretary of state’s office twice a month. They also notify the state when a policy is cancelled. In 2013, the state’s reporting process uncovered many fraudulent insurance policies. Some drivers bought these policies on purpose to skate the law, while others were duped by scammers.

What Percentage of Drivers in
Michigan Lack Vehicle Insurance?
21.0% National Average: 12.6 %
  • Your license may be suspended, and you’ll have to show proof of insurance — perhaps for the next six months — to get it back.
  • You’ll pay a $50 fine and some administrative fees.

If you don’t have insurance and you’re in an accident, things could be even worse. Here’s how:

  • You won’t be able to benefit from personal injury protection, and you’ll wind up paying your own medical bills.
  • If you’re at fault and get sued, you’ll be fully responsible for any settlement.

How Much Vehicle Insurance Do You Need?

With no-fault coverage, there’s no need to worry that your insurance won’t be enough to cover your medical bills. However, there are a few policy options you should look into.

First, the minimum coverage required by Michigan won’t cover damage to your car. For that, you’ll need collision and comprehensive coverage. The latter covers theft, fire, crashes involving animals, and natural disasters. While these help protect cars that are worth something, they can be skipped for autos that are heading to the junkyard in the near future.

Uninsured motorist coverage can help you collect damages for pain, suffering and wage loss if you in an accident with a hit-and-run driver or someone who doesn’t have insurance. Remember, more than one in give Michigan drivers is uninsured.

Third, you may consider upping your own liability coverage to $100,000 per injury and $300,000 per accident. It will help in case you are at fault in an accident and get sued for more than the minimum legal limits.

One other optional coverage worth noting is for motorcyclists, who can insure themselves for $20,000 in medical benefits if they choose not to wear a helmet. Unfortunately, that won’t probably be enough (if you live through the accident).

Catherine Chase, vice president of governmental affairs of the group Advocates for Highway and Auto Safety, says this coverage is “insufficient” and instead encourages people to wear helmets. “If there’s a serious crash of an unhelmeted motorcyclist, these lead to lifelong, costly brain injuries or quadriplegia. When these crashes happen, they are violent and unforgiving and, unfortunately, extremely costly.”

For more on the common types of insurance, see our MoneyGeek guide to car insurance.

Car Insurance and Special Groups

Teen Drivers in Michigan

Insurance companies have different stances toward teenage drivers. Some want to be notified as soon as they get a learner’s permit, while others choose to wait until the teenager has an actual license.

If there are multiple vehicles on your policy and you add your teenager to it, the new rate may be based on the most expensive car to insure. Talk with your agent about how to best insure your child. Typically, part of the solution is giving them the safest car to drive.

After all, teens are more likely to die from an automobile crash than from anything else. Placing them in a large-frame car with advanced safety features won’t just lower a premium — it will also lower the risk of serious injury in case of a crash.

The Difference a Teen Makes to Your Premium

Median annual price change for families with a teen driver on their policy:

$1,880 increase This is a difference of 58%.
Comparison of Premium Ranges
25th – 75th Percentile Median
Watch Your Speed

Average annual premium increase if your teen gets a speeding ticket after driving 11-15 mph over the speed limit:

Male teen

$2,486

Speedometer
Female teen

$2,469

Check Out Discounts for Michigan Teens

Impact on annual premium with Good Student and Defensive Driving discounts:

$545 saved

Compare Premiums from Michigan Providers

Policy costs vary greatly, so shop around. Check out the annual average premiums for a married couple with a 16-year-old teen driver in Michigan:

Insurance Provider Min MEDIAN MAX
Auto-Owners Insurance $2,653 $4,342 $9,689
Auto Club Group $2,464 $4,175 $14,867
Progressive $2,446 $5,016 $18,238
State Farm $4,534 $8,882 $28,607
Allstate $5,745 $11,257 $36,983

Michigan Premiums: Minivans vs. Mustangs

The car you choose for your teen makes a huge difference to your insurance premium.

Average premium for two 2014
Mustang GTs

$8,906

Average premium for two 2008
Town and Country Limiteds

$6,511

Annual benefit of minivans:

$2,395 saved This is 27% less expensive.
Premium Comparison for Two Adults + 16 Year Old
25th – 75th Percentile Median

College Students in Michigan

The state of Michigan leaves it up to individual companies to determine how to insure Michigan residents as they go off to college. If you’re bringing a car from out of state, you may be best served by talking to a Michigan-based insurance agent since Michigan has no-fault insurance. By driving a car registered elsewhere without seeking Michigan insurance, you won’t get the benefits of unlimited personal injury protection. Moreover, you open themselves up to being sued should you be at fault in an accident.

No matter where you go to school, try to avoid letting your vehicle become “the dorm car.” If someone down the hall totals the car, you or your parents may end up being held financially responsible.

College vs. High School Drivers in Michigan

Median annual premium change with a college student vs. high school driver

$1,002 decrease This is a decrease of 17%.
Comparison of Premium Ranges
25th - 75th Percentile Median

How a College Student Affects Your Michigan Rates

Each year, study your policy before it renews to see whether you could get a better rate. Consider, for example, the average premiums for a married couple with a 19-year-old college student in Michigan.

Provider Min MEDIAN MAX
Auto-Owners Insurance Co $2,235 $3,620 $7,246
Auto Club Group $2,471 $3,668 $8,568
Progressive $2,090 $3,978 $12,686
State Farm $2,931 $6,314 $17,019
Allstate $4,973 $9,373 $25,621

Distance Discount for Michigan College Students

You may see a modest decrease in your family’s premium if your student lives 150+ miles from home.

Average premium for a 19-year-old male
  • $6,269 at home
  • $5,386 at school
  • $883 in savings
Average premium for a 19-year-old female
  • $6,176 at home
  • $5,303 at school
  • $873 in savings

How Car Choice Affects Premiums in Michigan

Since insurers consider sports cars high-risk vehicles, your college student will save on premiums if he or she drives a sedan or minivan.

2014 Mustang GTs (2)

$7,004

2008 Town and Country Limited minivans (2)

$5,107

Annual benefit of minivans

$1,897 saved This is 27% less expensive.
Premium Comparison for Two Adults + College Driver
25th - 75th Percentile Median

Military Drivers in Michigan

If you’re moving to Michigan for military duty, already stationed here or a veteran living in The Great Lakes State, you’re probably qualified for a discount on car insurance. When shopping around for the best deal, consider talking to an independent insurance agent, who may have more resources to explore for military discounts. Michigan has about 2,000 active-duty military personnel living in the state, and with a good driving record, military members can expect to pay less on auto insurance, which they’ll need to have in place before registering a vehicle with the state DMV.

It’s easy to apply for a vehicle title and registration in Michigan. Just complete and sign an Application for Certificate of Title and Registration (TR-11L) and provide a copy of your insurance policy or coverage ID card.

Michigan Service Members:
How the Vehicle You Buy Affects Your Premium

Insurers associate sports cars with speeding, which may explain why an older model SUV has less impact on your premium than a recent model sports car.

Comparison of Premium Ranges by Driver Age and Vehicle for a Military Driver
25-Year-Old Driver
50-Year-Old Driver
25th - 75th Percentile Median

Age-Based Perks for Michigan
Service Members

Median auto insurance
for service members:

$2,146
Male (25 yrs)$2,567
Male (50 yrs)$2,224
$343 savings
Female (25 yrs)$2,580
Female (50 yrs)$2,252
$328 savings

Compare Average Premiums Available to Michigan Military Personnel

When you're looking for an affordable insurance policy, it pays to do some comparison shopping. Check out the average annual rates you can get in Michigan.

Premium Comparison for a Military Driver
25th - 75th Percentile Median

Seniors in Michigan

Some, though not all, senior drivers use their car less because they stop commuting to and from work. This makes them eligible for two state-mandated benefits:

  • From the age of 60, drivers who aren’t working can reduce their premiums by removing the portion of their personal injury protection that would compensate them for lost work time.
  • From the age of 65, drivers who put less than 3,000 miles on their car annually qualify for a reduced premium.

Undocumented Workers in Michigan

Michigan generally does not grant undocumented immigrants driver’s licenses – a prerequisite to car insurance. However, some people who arrived in the United States with the regular papers can still get a driver’s license and, ultimately, insurance through a federal program called Deferred Action for Childhood Arrivals. DACA allows young immigrants to apply for licenses if they fit the following criteria:

  • Were in the U.S. but not yet 31 years old on June 15, 2012
  • Have lived in the U.S. since June 15, 2007, but came before turning 16 years old
  • Have committed no felonies or serious misdemeanors
  • Have graduated from high school, are still in school or have served in the military

Ridesharing Insurance in Michigan: Are You Covered?

As of March 2016, the Michigan House of Representatives and Michigan Senate were crafting a single bill that would regulate Uber, Lyft, and other transportation network companies (TNCs), better known as ridesharing companies.

Drivers for Lyft, Uber and other TNCs are in a tricky spot until legislation passes. That’s because personal car insurance policies weren’t crafted with TNCs in mind, and they usually don’t cover accidents incurred while “driving for hire.” Rideshare vehicles are like taxis, but only some of the time — and this difference is crucial to insurers, who develop premiums and policies based upon usage.

For the time being, TNC drivers should talk with their insurance agent about how to best cover themselves at all times, including when they are using the car for personal use, when they have the app on but no passengers, when they are on the way to pick up passengers and when they are driving passengers to their destination.

They should also not assume their TNC insurance policy covers all possibilities — the last thing they need is to be hit paying for their own injuries when they thought they had personal injury protection.

Car Accidents: How to File a Claim in Michigan

Insurance only gets used in the case of accidents, which thankfully are not everyday occurrences. Still, you need to know what to do in case you are in one:

  • If the crash isn’t serious, pull over to the side of the road.
  • If the crash has caused injuries or at least $1,000 of damage — or if you hit a deer — call the police. (Michigan is in the top 10 states where you are mostly likely to hit a deer — number 10, to be precise.) By doing this, you can count on the police to fill out a report that can be used by the insurance company.
  • Get the name, address, license number and insurance details of the other driver.
  • As soon as possible, call your insurance company if you need to file a personal injury claim or need to get your car fixed.

Best and Worst States for Drivers: How Does Michigan Rank?

Michigan is in the top 20 for traffic safety in terms of traffic fatalities per mile driven. Part of this could be attributed to taking DUI laws seriously — the state has a lower rate of alcohol-related traffic fatalities per mile than the nation as a whole. And according to statistics compiled by the National Highway Traffic Safety Administration, Michigan drivers and front-seat passengers buckle up at higher rates than the average American.

Still, Chase says Michigan residents could be even safer. For example, she believes more parents should make sure older children are wearing seat belts. As she puts it: People are definitely more cognizant about putting their children in car seats and booster seats, but after they graduate out of the booster seats, it’s not then, ‘Okay, you don’t need to take care of your child anymore!’”

Michigan Driver Safety Ranking

22nd in the U.S.
About Our Data

The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.

How did we create the safety rankings?

We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).

Driver Safety Profile Number of Fatalities Fatality Rate

The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.

Ranking
(National)

Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.

Drunk Driving-Related Fatalities 256 2.69 12th
Speeding-Related Fatalities 255 2.68 17th
Passenger Vehicle Unrestrained Fatalities 183 1.92 10th
Unhelmeted Motorcycle Fatalities 67 0.70 28th
Multiple Vehicle Fatalities 437 4.59 26th
Pedestrian Fatalities 148 1.50 32nd
Bicyclist Fatalities 27 0.27 41st
Total Vehicle Fatalities 947 9.95 19th

Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety

Michigan: Protecting You from Injury on the Road

Chase is pushing for a primary seat belt law for everyone in all seats in Michigan, meaning drivers could get pulled over if spotted with an unbuckled passenger anywhere in the car. “In the back seat is mostly where children and teenagers sit, and they are one of the least-likely populations to buckle up,” she says. “And if the message is that it’s not required that people buckle up in the back seat, they can get a false sense that it’s not as important. It really is critical because any unrestrained passenger in the back seat could then become a projectile that injures others.”

Below are some of the laws that Michigan motorists will need to follow when they get their license and are out on the roadways:

Safe Driving Laws – Michigan

  Requirement State Law Details
Mandatory seat belts Anyone above the age of 16 must wear a seat belt; drivers can get pulled over if they or their front-seat passengers are not buckled in
Child passenger safety Children under 8 must use child restraints; when they turn 8, they can use adult seat belts
Driving under the influence (DUI) The legal limit is 0.08 BAC; for drivers under 21, it is 0.02. For a first offense, penalties may include up to 93 days in jail, a $500 fine, 360 hours of community service and six points off a driver’s license; penalties higher for multiple offenses.
Ignition interlock after DUI (in some counties) If a driver is caught with a BAC over 0.17, interlocks are mandatory
Talking on cell or texting while driving Texting while driving is illegal, and drivers can be pulled over for it; novice drivers cannot talk on the phone at all while behind the wheel
Protections for young drivers 16-year-olds cannot drive between 10 p.m. and 5 a.m., nor can they have more than one minor in the car
Motorcycle helmet law Partial Minors riding on a motorcycle must wear helmets; if adult drivers or passengers wish to avoid helmets, they must purchase additional insurance
Bicycle helmet law No statewide law

Source: Governors Highway Safety Association, 2016 and National Highway Traffic Safety Administration

Car Insurance Resources for Michigan Residents

Brief Explanation of Michigan No-Fault Insurance

Given Michigan’s distinctive insurance system, it’s worth taking five minutes to read up on how it works and what no-fault insurance does and doesn’t cover.

Department of Insurance and Financial Services: Filing a Complaint with DIFS

If you believe you were treated inappropriately by an insurance agent or had trouble purchasing insurance, you can call the Office of Consumer Services at (877) 999-6442 or file a written complaint at this website.

Department of Insurance and Financial Services: Information on Purchasing Auto Insurance

An FAQ page for consumers, the DIFS provides answers about rates, penalties and what to do while looking for coverage. The department website also lists you can get reduced premiums from insurance companies.

Department of Insurance and Financial Services: Insurance Entity Search Page

Consumers can quickly verify whether an insurer is licensed to do business in Michigan.

How to Reduce the Cost of Your Car Insurance

The DIFS published this bite-sized guide featuring basic steps anyone can take to make their policy more affordable.

Michigan Automobile Insurance Placement Facility (for high-risk drivers)

The DIFS has a contingency plan for people who are licensed or have vehicles registered in the state but who are not able to get insurance via traditional means. Though any insurance agent can help you fill out the paperwork to the MAIPF, you can also contact the DIFS directly with questions.

Your Guide to Automobile Insurance for Michigan Consumers

The DIFS has a contingency plan for people who are licensed or have vehicles registered in the state but who are not able to get insurance via traditional means. Though any insurance agent can help you fill out the paperwork to the MAIPF, you can also contact the DIFS directly with questions.

Updated: July 29, 2017