Every driver who uses roads in the state of Michigan must adhere to the laws around insurance coverage. The state’s governor signed no-fault auto insurance reform legislation in May 2019 to improve the availability of affordable coverage for drivers in the state. Prior to this legislation being signed into law, the state was among the highest in the United States for auto insurance costs. This guide outlines the new laws that are in effect today, including the mandatory coverage requirements and penalties that apply to drivers who fail to comply.
Mandatory Coverage Requirements in Michigan
State laws require drivers to maintain three basic types of coverage on their no-fault auto insurance policies. These coverage types are:
- Property protection (PPI)
- Personal injury protection (PIP)
- Residual bodily injury and property damage liability (BI/PD)
Any motor vehicle that is required to be registered and will be driven or moved on a highway or state road must maintain these coverage types at all times. Property protection covers damages caused to tangible properties, such as structures, parked cars, fences, and landscaping elements. The state doesn’t mandate an amount for this type of coverage.
Personal injury protection provides reimbursement for expenses associated with an injury, such as lost wages, medical expenses, replacement services, and care. Michigan state law requires drivers to carry $1 million in PIP coverage on their policies, with the exception of drivers on Medicare, who have the option to opt out of PIP medical benefits coverage.
Residual bodily injury liability covers the driver if they cause an accident that results in severe injuries to one or more individuals. State law mandates minimum coverage amounts of $250,000 per person and $500,000 per accident. Property damage liability covers more severe damage to another person’s vehicle who lives outside of Michigan. The minimum coverage amount for property damage liability is $10,000.
Additional Coverage Options Available
Along with these required types of coverage, many auto insurance companies offering policies to Michigan-based drivers also offer additional coverage options. Learn more about these coverage types to determine whether to include one or more on an auto insurance policy.
Comprehensive coverage pays for damages incurred to your vehicle caused by something other than a collision with another vehicle. This coverage type may apply if your vehicle gets damaged by:
- Weather events
Glass damage may also qualify under the comprehensive coverage of an auto insurance policy. When you own a valuable vehicle, you may want to add comprehensive coverage to your policy.
If you sustain severe injuries from a car crash, you may need additional in-home care that costs more than what a minimum policy will cover. Drivers in the state of Michigan may qualify to add an optional attendant care rider, which pays more toward the costs of a home health aide following a serious injury resulting from a collision.
Penalties for Uninsured/Underinsured Michigan Drivers
Failing to maintain the required auto insurance coverage amounts can be a costly mistake for drivers in Michigan. Since the state is no-fault, each driver’s auto insurance policy pays for damages and injuries, regardless of who caused the accident. The state’s leaders made the change to no-fault insurance legislation partially in response to complaints from accident victims who were undercompensated or denied compensation altogether. This left victims responsible for paying for their own medical bills, damages, and other costs associated with their accidents.
Driving without the required insurance coverage in Michigan is classified as a misdemeanor. On your first offense, you might face a fine of up to $500. You may also lose your license for 30 days or until you secure auto insurance coverage. Some offenders also face up to a year in jail. To reinstate a suspended license, you must pay a service fee. The current fee is $125.
If you have insurance but can’t show proof of coverage when pulled over by police, you may be able to submit proof with the payment of a service fee before your court date and avoid the other penalties. Since drivers who drive without insurance coverage are viewed by insurers as riskier, many drivers have to pay higher premiums following a lapse in coverage. Depending on the length of the coverage lapse, a driver may have to file Form SR-22 with proof of insurance to reinstate their license.
Auto Insurance Companies in Michigan
Many auto insurance companies offer coverage to drivers throughout Michigan. As mentioned, the state previously had some of the highest rates in the nation. However, legislative changes have resulted in lower rates for drivers located across the state. Along with location, some of the factors that impact rates include:
- Driving record of the policyholder
- Coverage amounts
- Marital status
- Number of high-risk violations
- Make and model of vehicle
- Credit history
- Age of the policyholder and covered drivers
Affordable Car Insurance in Michigan
NerdWallet reports that the average cost of full coverage auto insurance for a driver in Michigan is just over $2,000 per year. Minimum coverage insurance costs an average of $913 per year. The company that offers the most affordable rates overall is Secura. Drivers insured with Secura pay an average of $82 per month. Younger drivers may also qualify for lower rates with this company, as the average premium is $169 per month for 20-year-olds.
Drivers in their 30s can qualify for affordable full-coverage policies from Secura as well. An individual with a clean driving record can expect to pay about $87 per month for a full-coverage policy with Secura. The next-cheapest insurer is GEICO with an average premium of $97 per month. Other insurance companies offering coverage to Michigan-based drivers include Wolverine Mutual, MetLife, Chubb, Frankenmuth, Hastings Mutual, Farmers, Meemic, Progressive, and Westfield.
If you’re shopping for a new auto insurance policy, consider requesting quotes from various insurers to compare options and decide which company offers the coverage you want at a price you can afford. It’s important for all drivers to maintain sufficient insurance coverage to protect themselves and those around them on the road.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.