As a Michigan resident, you need to be educated on auto insurance requirements to make certain you meet state law and know what you are buying. Many times people rely on an insurance agent to select the appropriate coverage, but it is important to understand what the coverage is and what protection it provides.
Michigan State Minimum Limits of Liability
Michigan minimum liability limits are set with bodily injury at $20,000 per person up to $40,000 total per accident. $10,000 is the minimum for property damage. Only nine other states allow lower limits of liability.
PIP, Personal Injury Protection, is the medical portion of a Michigan policy that the auto insurance company is responsible for. In Michigan, insurance carriers are responsible for paying medical coverage up to $500,000. Michigan auto insurance policies have different levels of PIP available.
- Coordinated with medical means your primary health insurance will help cover the costs of injuries in an automobile accident. Having primary health insurance through an employer will help reduce the cost of auto insurance. Anything your primary does not cover, your auto insurance will pick up the remainder. Neither Medicaid or Medicare qualify for coordinated medical because they will not pay for medical injuries due to an automobile accident.
- Coordinated with loss of income will pay your wages above what your primary health insurance covers. So if your disability coverage through your employer is 60%, your car insurance policy will cover the remaining 40% so you will receive your full income while disabled.
- Coordinated with both loss of medical and loss of income includes both of the coverages listed above.
- Full medical means your auto insurance will pay for all of your medical expenses. Full medical coverage is a more expensive coverage versus coordinated medical because the insurance company will be solely responsible for your medical bills in case of injury in a vehicle. Deductibles are often optional on medical coverage. If you opt for a deductible, you will be responsible for paying it at the time of loss.
Property Protection Insurance, PPI
All Michigan drivers are required to carry 1,000,000 coverage for property damage. In most states, your property damage coverage amount is listed as the third number in the liability limits. 20/40/10 coverage would come with $10,000 coverage for property damage.
A Michigan car insurance policy does list the minimum property damage limit, however it only applies to out of state claims. Any property damage which occurs in the state of Michigan is covered under a separate coverage called property protection insurance or PPI for short. So if you are a Michigan resident and drive out of state frequently, make sure to increase your minimum property damage limit so you can be certain to have enough coverage.
All insured Michigan drivers are required to pay Michigan's Catastrophic Claims Association fee. The fee is unique to Michigan and ensures all insured drivers will have unlimited medical coverage when injured in a car accident. The only insured vehicles not required to have the MCCA fee are vehicles in storage with comprehensive coverage only listed on the policy.
Penalties for No Proof of Insurance in Michigan
As of right now, Michigan does not have an automated program in place to track uninsured drivers. Proof is required at the time you renew your registration and is required in your car at all times. Failure to provide proof of insurance to a police officer could be cause for stiff penalties.
- $25 fine is charged for no proof of insurance in your car even if you vehicle is actually insured. You will need to provide proof of insurance on your vehicle on the date of the infraction within thirty days to avoid further penalties.
- No Proof of Insurance Fee is $200
- No Proof of Insurance Under the Insurance Code is $500
- Payment plans are available for the combined $700 fine. Twenty four months is the standard time period and is usually paid in two installments. $350 up front and $350 the following year.
Knowing the Michigan's auto insurance requirements is the first step to becoming a legal licensed and insured driver. It is important to not only understand what coverage is required but how it works. Michigan is a no fault state and has several unique rules. Brush up on your Michigan car insurance laws before taking to the roads to ensure your policy works for you and not against you.