Michigan Car Insurance Laws | Bankrate

Michigan car insurance laws state clearly that drivers in the Great Lake State must have a certain amount of car insurance to drive legally on public roads. Failure to do so can lead to fines and other penalties—and higher coverage rates down the line. Michigan is a no-fault state, which adds a layer of complexity to how your car insurance financially protects you and how you receive compensation in claims.

Car insurance laws in Michigan

Michigan drivers are required to follow several car insurance laws. Some of these laws are different from other states because Michigan is considered a no-fault state. Here are the basic laws around car insurance in Michigan:

• Insurance requirement: Michigan requires all drivers to carry at least a minimum amount of car insurance coverage as determined by state law.
• Proof of insurance: Michigan drivers must carry proof of insurance in their vehicles at all times. Failure to show physical or electronic proof of insurance when asked by law enforcement may have their license suspended, face fines up to $500 and serve up to one year of jail time.
• Failure to show proof of insurance: Drivers who cannot provide proof of insurance when asked by law enforcement may have their license suspended and face substantial fines and potentially jail time.
• Minimum insurance requirements: Drivers must carry at least a minimum of 50/100/10 liability insurance, personal injury protection (PIP) and property protection insurance (PPI). The state’s default, however, is 250/500/10 to help provide more financial protection following an at-fault accident. Those who choose less than this amount will need to sign a waiver approved by the director of insurance and financial services.

Minimum insurance requirements in Michigan

Michigan has minimum requirements for bodily injury and property damage liability, sometimes called residual liability insurance. The minimum coverage is abbreviated as 50/100/10, which means:

• $50,000 in bodily injury liability per person per accident
• $100,000 total bodily injury liability per accident
• $10,000 in property damage liability per accident

The default bodily injury and property damage liability coverage limits are 250/500/10, which means these limits are what you would normally receive a quote for when you are purchasing Michigan auto insurance. 

However, liability insurance in Michigan works differently because it is a no-fault state. In most other states, the not-at-fault driver can file a claim directly against the at-fault driver’s liability insurance. In Michigan, liability insurance generally only comes into play if the not-at-fault party sues the at-fault driver for serious injury, death or pain and suffering that exceeds what their own insurance covers (PIP).

If you can afford the increased coverage, insurance experts would generally recommend buying as much coverage as possible, because the minimum might not cover you financially if you are sued following a serious accident.

No-fault insurance coverage requirements in Michigan

You are also required to carry additional types of coverage, including personal injury protection (PIP) and property protection insurance (PPI). This is because Michigan is a no-fault state. In no-fault states, drivers file claims with their own insurer, even if the other driver caused the accident. If this happens, PIP and PPI coverages help pay for the expenses incurred in the accident up front, and your insurer will recover all costs of the accident you incurred from the at-fault party’s insurer via a process called subrogation.

PIP pays for medical expenses and lost wages. In Michigan, there are six options for PIP coverage that the policyholder can choose from, including a default option with no maximum limit.

PPI pays for property damage to other people’s stationary property, including fences, parked cars or homes. This coverage will pay up to $1 million for covered damage. 

Penalties for driving without insurance in Michigan

It is illegal to drive without insurance coverage in Michigan. If you are found to be doing so, you may have your license suspended until you provide proof of insurance. You may face fines of up to $500, as well as a reinstatement fee of at least $125. Additionally, your ability to register your car may be restricted until you have verified proof of insurance, and you may be required to purchase an SR-22 certificate of financial responsibility to get your license reinstated. A maximum one year jail sentence is also a possibility according to state law.

Additional auto insurance coverage options in Michigan

Although Michigan drivers are only required to carry liability, PIP, and PPI coverage types, many drivers choose to purchase optional coverage. Buying optional coverage typers will increase your car insurance premium, but you will get more financial protection. Here are some of the most common add-on coverage types available to drivers in Michigan:

• Collision insurance: In Michigan, collision insurance pays to repair your vehicle’s damage after an accident with another vehicle or a stationary object, like a light pole. Michigan has three levels of collision coverage, and unlike in other states, you must have collision coverage for insurance to pay for damage to your car, even if you are not at fault for the accident. Under Michigan’s “mini-tort” law, you may be able to recover up to $1,000 from the at-fault driver to cover damage to your vehicle, but this is often not enough to pay for damages from a collision.
• Comprehensive insurance: Comprehensive insurance pays to repair your vehicle’s damages after non-accident incidents, like floods and falling objects. This coverage also pays for vehicle theft, vandalism, fire and cracked windshields. Comprehensive insurance also has a claim deductible.
• Uninsured/underinsured motorist insurance: Uninsured and underinsured motorist coverage pays for injuries and vehicle damages if you get into an accident with a driver who does not have insurance or does not have enough insurance to cover the losses.

Frequently asked questions

• What are the three levels of collision insurance in Michigan?
  

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  Michigan’s unique collision insurance structure offers three levels of coverage to drivers: limited, standard and broad form:

  • Limited: Does not pay for damage to your vehicle if you are more than 50% at fault for the collision, but will pay, up to your policy limits, for any covered damage if you are 50% or less at fault for the collision (minus your deductible).
  • Standard: Pays to repair covered damage to your vehicle, up to your policy limits, regardless of fault. You must pay your deductible regardless of fault status.
  • Broad form: Similar to standard coverage, except you do not have to pay your deductible if you are less than 50% at fault for the collision. The deductible still applies if you are more than 50% at fault for the collision.

  Note that you must have collision insurance in Michigan for collision damage to your vehicle to be covered by insurance. In many other states, the at-fault driver pays for collision damage to your vehicle, and your collision coverage only applies for repairs to your vehicle if you are at-fault. Michigan’s insurance policies make it even more compelling to purchase collision insurance in the state, and most insurance agents recommend purchasing at least limited collision coverage.

• What is the best car insurance company in Michigan?
  

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  Many car insurance companies offer coverage in Michigan, including national and regional options, and each comes with its own strengths and weaknesses. You can start your research with our list of best car insurance companies in Michigan which highlights providers that excel in certain areas, like having low premiums or providing good customer service. From there, you can request quotes from a few companies and compare them to find the best car insurance for your situation. Don’t forget to use the same types and amounts of coverage for your quotes so you can do an apples-to-apples comparison.

• How much does car insurance cost in Michigan?
  

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  In Michigan, the average full coverage car insurance premium costs $267 per month (as of November 2025). Minimum coverage in the state typically costs $75 per year. By comparison, the national average premium is $225 per month for full coverage and $68 per month for minimum coverage.

  Michigan drivers may be disappointed to see their rates higher than the national average. Average car insurance rates have been on the rise across the country due to increased costs of repairs, supply chain challenges and inflation. No-fault states generally see above-average car insurance rates because of the higher level of coverage, but you may be rewarded with lower out-of-pocket costs in the event of an accident.

• Do Michigan car insurance laws and requirements apply when leasing or borrowing a car?
  

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  Yes, Michigan car insurance laws and requirements apply when leasing or borrowing a car. If the person you are borrowing the car from lives in Michigan, they should have the minimum amount of required insurance already. If they do not, you may want to consider borrowing someone else’s car.If you do not own a car but are borrowing one from a friend or family member for an extended period of time, you may want to consider purchasing non-owner car insurance, which provides liability coverage in the event of an accident. If you live with the person whose car you are borrowing, however, a better solution is to have yourself added to their policy (and may be required).If you are leasing a car, you will likely be required to purchase full coverage car insurance, in order to protect your lessor’s interest in the vehicle.

• Will my out-of-state insurance cover me in Michigan?
  

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  It depends. Since Michigan is a no-fault state, the coverage types needed to offer financial protection are different than in at-fault states. Before planning your trip, it’s advised that you discuss your policy with a licensed insurance agent. If you plan on staying in Michigan for more than 30 days, you will need to update your policy fully to reflect Michan’s no-fault car insurance laws.