Michigan Car Insurance Requirements
The Wolverine State is one of 12 in the Union where auto insurance is regulated by no-fault laws. As a no-fault state Michigan aims to keep its civil court system free from excessive personal injury lawsuits by requiring drivers to purchase no-fault car insurance for any vehicle they intend to register and drive. The mandate also covers vehicles owners intend to register and then allow others to drive.
What’s different in Michigan is their emphasis on the “no-fault” portion of their compulsory auto insurance law. As such, they require a three-part car insurance policy in order for drivers to be in compliance. Those three parts are:
- Personal Injury Protection (PIP) – PIP helps to pay your medical expenses if you’re hurt in an accident, regardless of who is at fault. There is no upper limit except in the area of lost income which is capped at an amount equal to three years of salary.
- Personal Property Insurance (PPI) – PPI pays for damage you might do to the property of others including things like buildings, walls, fences, and landscaping elements. It also pays for damage you might cause to vehicles that are properly parked on the street or in a parking lot.
- Standard Liability – Michigan’s standard liability portion is similar to liability insurance in most other states. Drivers are required to carry $20,000/$40,000 to pay for bodily injuries and deaths and $10,000 in property damage for accidents in other states.
Failure to Maintain Insurance
Michigan has among the most severe penalties for violating compulsory auto insurance laws. For example, every driver is required to at least purchase a cheap car insurance policy containing the basic elements of no-fault insurance. If you’re caught driving without such a policy you could face a fine of $500, a one-year jail sentence, or both. And that’s just for a first offense. Subsequent offenses incur stiffer penalties.
If you have an accident while driving without insurance, you’re subject to the same penalties. However, you can also be sued and held personally liable in a court of law. In such a case your assets could be seized, your wages garnished, and so on.
Proof of Insurance Requirement
When a driver in Michigan purchases no-fault car insurance he is provided with documentation from his carrier. That documentation must be carried in the vehicle and produced at the request of a police officer.
A driver who cannot show his documentation is subject to a civil fine. His registration may also be suspended for up to 30 days if he cannot furnish documentation to a court. Finally, the court may require the driver to purchase a new, non-cancelable auto insurance policy before reinstating his registration.