Michigan has a unique and complex car insurance system. As we noted earlier, Michigan is a no-fault state, so if you are injured in an accident, you will typically file a claim with your car insurance provider. To get the compensation you deserve for injuries, property damage, and other losses, you must investigate the crash, build a strong case, and negotiate for maximum results. If you are an injured accident victim, consult a Michigan car accident lawyer to help you make sense of your policy and options.
In general, the amount of insurance you have purchased will greatly impact your settlement or verdict. Like most states, Michigan has a set standard minimum mandatory car insurance to purchase. Without this, you cannot legally drive. Unlike most states, though, you have a wider range of tiered coverage options.
Here’s something else that’s original to Michigan: It is the first – and, so far, only – state to offer “unlimited personal injury protection” (PIP) coverage. If you buy this type of insurance, there is no cap on how much you can be compensated for medical expenses due to a car accident. However, Michigan law also allows you to purchase PIP insurance with a lower limit, or even no medical coverage at all if you have health insurance.
Minimum mandatory insurance
Michigan requires drivers to purchase three types of coverages: Personal Injury Protection (PIP), Property Protection (PPI), and Residual Bodily Injury and Property Damage Liability (BI/PD).
- PIP – Personal injury protection covers crash-related medical expenses, lost wages, and replacement services up to the policy limit. In Michigan, drivers must choose from six minimum PIP coverage options: unlimited (which is the default), up to $500,000, up to $250,000, up to $250,000 with exclusions, up to $50,000, or opt out. Note that this only applies to the medical expenses portion of PIP – even if you opt out of the medical coverage entirely, you still have coverage for wage loss, replacement services, and funeral and burial expenses.
- PPI – Up to $1 million for damage to your and other people’s property.
- BI/PD - This covers the cost of your lawyer and damages for which you may be found liable in cases where people are seriously injured or killed. Minimum coverage is $20,000 per person injured per accident, $40,000 per accident, and $10,000 property damage per accident. This is known as 20/40/10 coverage.
Optional car insurance available to Michigan drivers includes:
- Uninsured or underinsured motorist (UIM) – This coverage stands in for the other driver’s liability insurance if you are hit by an uninsured driver, or someone who doesn’t have enough insurance to cover the full cost of your claim.
- Collision and comprehensive – The required minimum car insurance package does not cover costs to repair your vehicle in a crash. Collision (crashes) and comprehensive (stolen, falling object damage, etc.) coverage may apply here. There are three types – limited, standard, and broad form. While not required by law, this is usually required by the lienholder if your vehicle is financed.
- Limited property damage liability – Aka “mini-tort” insurance, this policy protects you if the other driver sues you for their insurance deductible. You can get up to $3,000 in mini-tort coverage.
- Towing, roadside assistance, and rental car – Reimbursement for tows, flat repair, and rental car services related to covered events.
- Loan/lease payoff – Also known as “gap coverage” in case of an accident that totals your vehicle, this insurance will pay for the difference between the current value of your car and how much you still owe on your loan.