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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.

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About Mark Fitzpatrick

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Mark Fitzpatrick is a senior content director at MoneyGeek with over five years of experience analyzing the insurance market, conducting original research and creating content that can be personalized for every buyer. He has been quoted on insurance topics in several publications, including CNBC, NBC News and Mashable.

Mark earned a master’s degree in Economics and International Relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his economics and insurance knowledge to bring transparency around financial topics and help others feel confident in their money moves.