Car insurance in Michigan

What Michigan law requires you to carry

Michigan is a no-fault state, and a Michigan auto policy is built from three mandatory pieces, as the Department of Insurance and Financial Services (DIFS) describes them: Personal Injury Protection (PIP), Property Protection Insurance (PPI), and residual Bodily Injury and Property Damage liability (BI/PD).

In plain terms:

• Bodily injury liability: the state minimum is $50,000 per person / $100,000 per crash, but that is not what you get by default. Policies are issued at substantially higher default limits unless you sign a written selection of the lower minimum limits.
• Property damage liability for out-of-state crashes: $10,000 per crash. This is the coverage that responds when you damage someone's property in another state.
• Property Protection Insurance (PPI): a high limit fixed by statute for damage your car does to property in Michigan — buildings, fences, parked cars and the like. It is not optional and you cannot vary the limit.
• PIP: medical and related benefits for your own injuries. Since July 2020 you choose a medical level; $50,000 is the lowest dollar option recorded for Michigan, and it is only available to Medicaid enrollees.

Driving without insurance is a misdemeanor in Michigan, and the court can suspend your licence until you show proof of valid coverage. Insurance is also required before the Secretary of State will register or plate a vehicle.

Source: DIFS auto insurance FAQ.

The PIP medical choice — Michigan's biggest decision

Before the 2019 reform every Michigan policy came with unlimited lifetime medical benefits. Since July 2020 you pick one of six options, and some have eligibility conditions you must document:

1. Unlimited PIP medical coverage.
2. A high capped level per person, per accident.
3. A mid capped level per person, per accident.
4. The mid capped level with exclusions — available where the person being excluded has Qualified Health Coverage (QHC) that is not Medicare.
5. $50,000 per person, per accident — only if the applicant or named insured is enrolled in Medicaid, and any spouse and resident relatives have QHC, Medicaid, or PIP medical under another auto policy.
6. No PIP medical (opt out) — only if the applicant or named insured has Medicare Parts A and B, and any spouse and resident relatives have QHC or PIP medical elsewhere.

Two things people miss. First, if you do not make a valid selection, or cannot document the one you chose, the policy is issued at the default level and you are charged accordingly. Second, opting out does not strip the rest of PIP: wage loss, replacement services, and funeral and burial benefits stay in the policy.

A capped limit is a hard ceiling. DIFS puts it bluntly: whatever level you choose is the most your auto insurer will pay per person per accident, and bills above it can land on you. Insurers must also offer a rider covering attendant care above each of the capped PIP levels.

Sources: DIFS auto insurance FAQ and the DIFS no-fault FAQ.

How fault and claims actually work here

Your injuries: you claim on your own PIP, regardless of who caused the crash. PIP is generally paid by the insurer of the owner or registrant of the vehicle involved, up to the medical level selected on that policy. If no insurer can be identified — for example a crash involving an uninsured vehicle — an injured person may apply to the Michigan Assigned Claims Plan, which pays capped benefits rather than the full range available on a private policy.

Suing the at-fault driver: no-fault limits, but does not abolish, liability claims. Your BI coverage responds when you are legally responsible for someone's death or serious injury, for pain and suffering, for medical costs beyond the injured person's own limits, and for crashes outside Michigan or involving out-of-state drivers. That is exactly why the higher default BI limits exist, and why dropping to the statutory minimum to save money exposes your own assets.

Your car: vehicle damage is not covered by PIP or PPI. In-state damage to your own car is covered only if you bought collision. Michigan's mini-tort rule lets you recover a limited, statutorily capped amount from a driver who was 50% or more at fault for damage not otherwise covered — if you carry collision you can only recover your deductible through it; if you do not, you can pursue the full statutory amount.

Medical bill disputes: Michigan uses a fee schedule and a Utilization Review process. If your provider thinks the insurer wrongly cut a bill as overutilized or overpriced, the provider — not you — files the appeal with DIFS. You do not have to act, but you can call DIFS with questions.

Source: DIFS auto insurance FAQ.

Optional cover worth having in Michigan

• Uninsured and underinsured motorist (UM/UIM). Not required in Michigan — which is precisely why it is worth asking for. If an uninsured or thinly insured driver seriously injures you, UM/UIM is what stands in for the liability policy they do not have. Ask for limits that match your bodily injury limits.
• Collision and comprehensive. Nothing in the mandatory package pays to fix your own vehicle for in-state damage. Michigan sells collision in more than one form (including versions that pay regardless of fault and cheaper versions that do not), so read the deductible and the fault conditions before choosing on cost alone.
• Limited property damage (mini-tort) coverage. An optional liability coverage that pays the mini-tort amount you can be held responsible for when you are mostly at fault.
• Excess attendant care rider. Insurers must offer this to anyone choosing a capped PIP level. If you have taken a cap, this is the coverage that matters most in a catastrophic-injury scenario.
• Higher bodily injury limits. Keeping the default limits, or going above them, costs far less than a judgment.

Source: DIFS auto insurance FAQ.

Rules Michigan drivers trip on

• Losing your Qualified Health Coverage after opting out. If you dropped PIP medical and your health coverage ends, you must notify your auto insurer and get QHC or PIP medical within 30 days. Injured inside that window, the Michigan Assigned Claims Plan may respond; injured after it with nothing in place, you may be personally responsible for your own medical bills. Keep your QHC letter where you can find it.
• Assuming "unlimited" is still automatic. Renewal paperwork is where the PIP level gets set. If you never answered, check your declarations page.
• Choosing the minimum bodily injury limits to save money. It is legal, but it must be chosen in writing, and it is the lowest wall between a serious injury claim and your savings.
• Attendant care by a family member. Since July 2021, insurers are only required to pay for 56 hours a week of in-home attendant care given by a relative, a household member, or someone with a prior business or social relationship with the injured person. Medically necessary care beyond that must still be covered up to your PIP limit, but how it is delivered may change.
• Motorcycles. Motorcycle policies do not include PIP, and PIP benefits generally depend on a motor vehicle being involved in the crash — a single-vehicle motorcycle accident may leave no PIP available. Motorcycle insurers are still assessed the MCCA fee.
• The MCCA assessment on your bill. This is a per-vehicle charge for the catastrophic claims pool, not an insurer markup. Drivers with unlimited PIP are assessed for anticipated claims plus any deficit; those with capped limits are assessed only the deficit portion.

Source: DIFS auto insurance FAQ.

What can and cannot be used to price your policy

The NAIC's figures put the average Michigan expenditure for liability, collision and comprehensive combined at $1,573 per insured vehicle in 2023 (precisely $1,572.77). That is a statewide average across all drivers and coverage choices — what you pay depends on your record, your vehicle, your territory and, heavily in Michigan, your PIP level.

The 2019 reform banned several non-driving rating factors. DIFS states the law prohibits insurers from using sex, marital status, home ownership, credit score, educational level, occupation and ZIP code in setting auto rates. Credit use is therefore limited rather than eliminated: rating on a raw credit score is barred, but an insurer may still use a credit-based insurance score if it demonstrates to the department that the score complies with MCL 500.2111(4).

Michigan is also a prior approval state — rates and policy forms must be filed with and approved by DIFS before they are sold, and DIFS has engaged outside actuaries to check that filings meet the required PIP premium reductions and avoid prohibited factors. None of that makes shopping pointless: approved rates still vary widely between companies, so compare the same PIP level, bodily injury limits and deductibles side by side.

Sources: DIFS auto insurance FAQ; DIFS no-fault FAQ.

How to complain to DIFS

The Michigan Department of Insurance and Financial Services regulates auto insurers, agencies and agents, and it handles consumer complaints about delayed or denied claims, incorrect charges, and conduct that does not match the policy or the law.

Step 1 — try the company first. DIFS asks you to attempt to resolve the problem with your agent or insurer before filing. Get the denial or billing decision in writing.

Step 2 — gather documents. Your complaint is reviewed on what you submit: declarations page, claim correspondence, bills, adjuster emails, dates and names.

Step 3 — file. Use the online complaint form, reached from the DIFS File a Complaint page.

What DIFS does next: it contacts the insurer, agency or agent for a written response, checks whether they are performing as required by your policy and the law, and explains options that may be available to you. You receive copies of the correspondence collected during the review and a letter setting out the department's findings.

To ask questions first, call DIFS at 833-ASK-DIFS (833-275-3437), Monday to Friday, 8 a.m. to 5 p.m., or email AutoInsurance@michigan.gov. The department's main site is michigan.gov/difs.

DIFS resolves regulatory and contractual disputes; it does not decide damages between drivers. For injury litigation or a disputed liability claim, that is a matter for a lawyer or the courts.