Michigan car insurance and the no-fault law

Michigan's no-fault system in one table

Michigan's law works differently from most states, so it helps to see each required piece side by side. The Department of Insurance and Financial Services (DIFS) describes three basic coverages that must be carried on every vehicle.

Notice what is missing: damage to your own car. In Michigan, the at-fault driver's insurance generally does not pay to fix your vehicle beyond the limited mini-tort amount described below, so collision coverage carries more weight here than in many states.

Choosing a PIP medical level

Since the state's insurance reform, Michigan drivers pick from 6 PIP medical options instead of receiving unlimited coverage automatically. If you do not choose, unlimited coverage applies.

Lower levels cost less, but if crash injuries cost more than the level you chose, the rest falls to your health plan or to you. The lower options also require proof, such as a statement from your health insurer or proof of Medicaid or Medicare enrollment. The Michigan Catastrophic Claims Association (MCCA) also charges a per-vehicle fee; with unlimited PIP you pay both the claims and deficit parts, while lower PIP levels pay only the deficit part. The personal injury protection guide explains PIP in other no-fault states for comparison.

Liability limits: the default and the floor

Residual liability protects you if you seriously injure someone and they sue beyond no-fault benefits, or if you cause a crash in another state. Michigan's default is $250,000 per person and $500,000 per accident. You can sign a form to choose lower limits, but not below $50,000 and $100,000.

Choosing the floor lowers the premium, but it also lowers the amount standing between a serious lawsuit and your personal assets. Before going down, read what liability insurance covers and consider whether you also need an umbrella policy.

Mini-tort and damage to your own car

The mini-tort rule fills a gap in no-fault. According to DIFS, if you are 50% or more at fault in a crash, the other driver can sue you for up to $3,000 for vehicle damage that their insurance does not cover. Drivers with collision coverage can recover only their deductible this way, while drivers without collision can seek the full amount.

Limited property damage coverage is an optional add-on that pays what you owe under mini-tort. Example: if you cause a crash and the other driver has a $500 collision deductible, mini-tort lets them recover that $500 from you or your limited property damage coverage.

Penalties for driving uninsured in Michigan

About 22.3% of Michigan drivers were uninsured in 2023, well above the national rate of 15.4%. The penalties are serious:

• A misdemeanor charge with a fine of up to $500.
• Up to 1 year in jail.
• A possible license suspension of 30 days or until you show proof of insurance.

Uninsured motorist coverage is optional in Michigan. Given the share of uninsured drivers, many policyholders weigh it carefully, especially if they chose a lower liability limit. If you regularly drive cars you do not own, the non-owner insurance guide covers a Michigan rule about when you count as an owner.

What Michigan drivers pay

NAIC data show Michigan drivers spent an average of $1,444.01 per insured vehicle in 2023, above the national average of $1,281. The average premium with collision and comprehensive was $1,572.77, also above the U.S. average of $1,438. These figures cover the whole state, so prices in Detroit and other cities can differ.

IIHS counted 1,098 crash deaths in Michigan in 2024, or 10.8 per 100,000 people, below the national rate of 11.5 per 100,000 people. Neighbors use different systems: Ohio, Indiana and Wisconsin are at-fault states.