The insurance coverage that you are paying for is the minimum required in Michigan and thus does not cover you for every situation. Your policy should explain the terms of your contact with the insurance company and your coverages in detail.

The basic Michigan No-Fault (PLPD) auto insurance policy has 3 parts that include Personal Injury Protection (PIP), Property Protection (PPI) and Residual Liability insurance (Bodily Injury and Property Damage).

Personal Injury Protection (PIP) coverage is $10,000. If you are hurt in an auto accident, this part of your no-fault policy will pay all of your medical costs. It will also pay, up to a maximum amount, for the wages you would have earned if you had not been hurt, for up to three years.

Property Protection Insurance (PPI) is the second part of no-fault insurance and will pay up to $1 million for damage your car does in Michigan to other people's property, such as buildings and fences. It will also pay for damage your car does to other people's properly parked vehicles. It does not pay for any other damage to cars you may damage if they are not legally parked.

The third and final section of required auto insurance in MI is Residual Liability insurance which protects insured persons from being sued as a result of an auto accident except in certain special situations. You can only be sued for a few items, including for up to only $500 if you are 50% or more at fault in an accident which causes damages to another person’s car which are not covered by insurance.

Your required minimum Michigan PLPD policy will pay up to certain amounts if you are found legally responsible. The minimum coverage offers 20/40/10 which stands for:

• Up to $20,000 for a person who is hurt or killed in an accident,
• Up to $40,000 for each accident if several people are hurt or killed.
• Up to $10,000 for property damage in another state.

Under Michigan's No Fault law, you are responsible for insuring your own vehicle against collision damage. The mini-tort law lets you recover only up to $500 from the at-fault driver for damage to your vehicle. Basically the mini-tort $500 amount is usually enough to cover your deductible if you have collision coverage. Since you were at fault you could not collect $500 from anyone but instead need collision coverage to make a claim for your own car's damages.

In a basic Michigan auto insurance policy you are not covered for the mini-tort amount you need to pay out if at-fault in an accident and sued by others unless you chosen to have this as optional coverage.

The mandatory No-Fault MI insurance coverages, which are required by law and which include some liability insurance designed to protect you in suits involving serious injury or death, do not cover this additional $500 liability. Insurance companies usually offer this coverage as an optional coverage which you may purchase for an extra cost. Insurers often call this coverage Limited Property Damage Liability.

With only minimum coverages, PLPD, than you are expected to pay for the $500 mini-tort amount, or the other party's deductible if that is less. Your insurance company would not pay since you did not pay them for this optional mini-tort coverage.

The premiums that you are paying for auto insurance are paying for your PIP, PPI and Residual Liability coverages as we described above. You can learn more about your specific policy by reading through it for a description of your coverages in your policy and by speaking to your agent if you have more questions.