What you need to know about Michigan car insurance
In Michigan, the No-Fault law requires you to carry car insurance. When registering your vehicle, there are particular coverage’s that you must have in Michigan, you need to know what that the basic no-fault car insurance policy provides.
Mandatory Car Insurance coverage’s
Bodily Injury and Property Damage (BI/PD)
The state requires you to carry these minimum limits:
$50,000 per person who is hurt or killed in an accident, $100,000 for each accident if several people are injured or killed and $10,000 for property damage in another state
Your policy list these limits as 50/100/10. If there is a lawsuit against you, the court could award a judgment above these limits. The severity of the accident and the assets that you have available will be factors in any awards given. The state recommends that everyone carries 250/500/10 effective July 1, 2020. You will have to sign a form if you choose a limit less than the recommendation.
Property Protection Insurance
No-Fault will pay up to $1 million for damages that you cause in Michigan to another party’s property, such as a parked auto, building, fence, or street sign. The property damage coverage that you chose will determine the limits that apply out of state.
Personal Injury Protection (PIP)
This part of no-fault car insurance policy pays medical costs if an injury occurs in a car insurance accident. After July 1, 2020, there are 6 options available.
- Unlimited PIP coverage
- $500,000 PIP coverage option
- $250,000 PIP coverage option
- $250,000 PIP coverage option with Medical exclusions. This choice is for drivers who have qualified health coverage (not Medicaid or Medicare) that covers auto accident injuries. Drivers can choose to exclude household relatives (that also have qualified plans) to lower this part of the coverage.
- $50,000 – Medicaid eligible consumer’s option
- Opt-out of PIP coverage – Available if the named insured has Medicare (Parts A and B). All other household relatives must have coverage provided by an auto insurance policy or qualified health insurance that will cover auto accident injuries.
Lost wages will also pay if you are unable to work due to injuries that were a result of the accident. PIP will pay up to 85% of your gross income for up to 3 years. Your salary determines this limit, and the maximum payout as of 2020 is ($5718). This amount will change every October.
Michigan Physical damage coverage
Collision pays to repair or replace your vehicle if there is damage from an accident. Information on the three types of collision coverage available in Michigan. This coverage will pay for the costs as long as they don’t exceed your car’s actual cash value. (Actual cash value is the car’s original purchase price minus the amount it has depreciated)
This coverage protects damage not resulting from a collision such as theft, glass damage, fire, flood, vandalism, explosion, hail, and contact with birds or animals.
Finance companies require collision and comprehensive coverage if you lease or finance your vehicle.
Optional liability coverage’s that you can purchase
Uninsured Motorist Bodily Injury (UM)
Uninsured motorist coverage is optional liability coverage that compensates you for excess wage loss and pain and suffering. This coverage only applies if a hit and run or uninsured driver hit you.
Limited Property Damage
Under Michigan law, if you are 50% or more at fault in an accident, the other person can sue you for up to $3000 for damage that their policy does not pay. If you purchase this coverage, your policy will pay up to $3000 to the other party’s collision coverage. If you are hit and need to know how to get your deductible back, go to How to file a mini-tort claim.
Michigan Miscellaneous Insurance Coverages
Rental Car Insurance Coverage
Car Rental coverage will pay a per-day amount towards a rental car if you make a collision or comprehensive claim while the repairs are completed to your vehicle.
Emergency Road Service
Road service is an optional coverage that pays towards the cost to have your vehicle towed or emergency services such as vehicle lockouts or running out of gas.