Car Insurance in Michigan

Driving or owning a car comes with a lot of responsibilities, including financial ones.

Accidents often are very costly, and it wouldn't be practical or smart to allow cars to be driven without having some sort of financial protection set aside, just in case.

That's why the Secretary of State (SOS) insists that all car owners carry no-fault insurance. With this type of insurance, your insurance company pays you, even if another party caused the accident.

Ways to Establish Financial Responsibility

While some states allow their residents to adhere to their financial responsibility laws by posting deposits or other such measures, Michigan doesn't. Simply put, car owners must carry Michigan no-fault insurance on their vehicles to comply with state regulations; out-of-state insurance policies won't do, even those issued in other no-fault states.

Michigan Liability Insurance Requirements for Private Passenger Vehicles

The only way to meet the state's financial responsibility requirements is to have at least the following amounts of bodily injury and property damage protection:

• $20,000 of coverage for injuries or death to one person in a single accident.

• $40,000 of coverage for injuries or deaths to more than one person in a single accident.

• $10,000 of property damage coverage.

You must also carry personal injury protection (PIP) and property protection insurance (PPI).

Remember, the coverage limits listed above are the minimum requirements dictated by the SOS. Insurance experts recommend a much higher level of protection, as accident expenses can have a crushing impact on your financial health. Plus, you should consider carrying other forms of auto insurance, such as comprehensive and collision; see our types of coverage articles to learn why.

Affording this extra coverage, though, can be difficult, especially if you're young. Being a savvy consumer is the best way to counteract this; that means comparison shopping online or by telephone to find the most attractive rates and coverages.

Acceptable Proof of Financial Responsibility

You don't want to be pulled over for a traffic ticket, or be in an accident, with no proof of insurance. So, be sure to take the insurance certificate issued by your carrier when on the road. It's the only way to provide acceptable, on-the-spot proof that you're properly insured.

Penalties for Failure to Maintain Financial Responsibility

If you don't meet the state's insurance standards, your license could be suspended. Plus, you won't be able to renew your registration or replace your vehicle’s license plate, and your registration could be canceled.

If your license and registration are suspended, you'll need to provide proof that you now have the proper coverage, as well as paying at least $50 in fees.