Michigan Car Insurance Laws
Michigan's no-fault system provides you and your family with unlimited lifetime coverage for medical expenses resulting from an auto accident, regardless of fault. Personal injury protection (PIP) benefits also include coverage for rehabilitation, lost wages and replacement services ($20 a day for up to three years).
Low limits of bodily injury liability and property damage liability – 20/40/10 – must be purchased but are referred to as residual coverage since the no-fault law protects insured drivers from being sued except in specific situations, which include:
- If you cause an accident (in Michigan) in which someone is killed, seriously injured or permanently disfigured.
- If you're involved in an accident (in Michigan) with a nonresident who is an occupant of a vehicle registered outside of Michigan.
- If you're involved in an auto accident in another state.
Property Protection Insurance
Property protection insurance (PPI) is a mandatory coverage specific to Michigan. It provides up to $1 million in protection from damage to buildings, fences, poles, other inanimate objects and legally parked cars. Claims under PPI only apply to unintentional damage to other people's property, so if you run into your own fence, you'll pay out of pocket to fix it.
Mini-tort: The "mini-tort" portion of the Michigan no-fault law establishes another situation in which you can sue or be sued. Under this provision, if you're 50 percent or more at fault in an accident and caused damage to another person's car and that vehicle is not completely covered by the owner's insurance policy, then you may have to pay up to $1,000 in damages.
This law also allows you to sue, or claim against, another driver who is 50 percent or more at fault for damage to your car if it isn't fully covered by your own insurance policy. You can receive up to $1,000 from the other party. If you have collision coverage, you're able to sue for your deductible amount (up to $1,000) from the other party.
A basic liability policy doesn't cover this $1,000 mini-tort liability, but you can obtain optional "limited property damage liability" coverage, for an extra cost, to cover this potential liability.
Protect your car: Since Michigan's no-fault PPI insurance only pays for damages to properly parked vehicles and the mini-tort law only allows you to sue an at-fault driver for up to $1,000 for other types of damage, it's important to carry collision coverage on your vehicle if it's newer or not easily replaced.
Uninsured motorist penalties for Michigan: You may have to pay $200 to $500 in fines, be sentenced to one year in jail and have your license suspended.
Age restrictions: There is no age restriction for owning a car in Michigan, but minors need a parent or guardian to sign an insurance policy on the car because it is a legal contract.
Insurance fraud: Due in part to Michigan's high insurance rates, fraud is more common there than in any other state. Many drivers carry fake car insurance -- one study in 2013 found that approximately 16 percent of car insurance policies in Michigan are fake.
Largest car insurance companies in Michigan by market share
||Company / Group
||Direct Premiums Written ($)
||Market Share (%)
||State Farm Group
||Auto Club Group
||Auto-Owners Insurance Group
||Allstate Insurance Group
||Progressive Insurance Group
||The Hanover Insurance Group Property & Casualty
||MI Farm Bureau Group
||Liberty Mutual Insurance Companies
||Farmers Insurance Group
||Berkshire Hathaway Insurance
|Source: A.M. Best market share rankings are based on direct premiums written in 2013.