Bodily injury liability in Michigan is the part of your auto policy that pays other people when you injure them in a crash you caused. Every registered vehicle must carry it, and since July 2, 2020, the default limits are $250,000 for injuries to one person and $500,000 for all injuries in a single accident.1Michigan Legislature. Michigan Code 500.3009 – Automobile Liability or Motor Vehicle Liability Policy Limits The coverage pays the injured person, not you, and it only comes into play when you are at fault.
Required Coverage Limits
If you never make a different choice, your policy carries the $250,000/$500,000 default for the whole term, and your insurer must keep it there.2Department of Insurance and Financial Services. Choice of Bodily Injury Liability Coverage Limits You can buy more if you want, and many drivers with assets to protect do.
The old minimums were $20,000 per person and $40,000 per accident, so the 2020 reform raised the floor substantially.
Choosing Lower Limits
You can drop below the default, but not below $50,000 per person and $100,000 per accident.1Michigan Legislature. Michigan Code 500.3009 – Automobile Liability or Motor Vehicle Liability Policy Limits To do it, you have to sign a specific form issued by the Director of Insurance and Financial Services. The form explains the risks of less coverage and makes you acknowledge that any judgment above your reduced limits comes out of your own pocket.2Department of Insurance and Financial Services. Choice of Bodily Injury Liability Coverage Limits
This isn’t a formality. In 2025, the Michigan Supreme Court held that an insurer who delivered a policy with lower limits without obtaining the signed form had violated the no-fault act, and the $250,000/$500,000 defaults applied automatically.3Michigan Courts. Bonter v Progressive Marathon Insurance Company If no one ever handed you that form, you may already have the higher coverage.
What Bodily Injury Liability Pays For
The coverage pays two categories of damages to people you hurt: non-economic losses and economic losses that exceed what the injured person’s own insurance covers.
Non-Economic Damages
These are the harms without receipts: physical pain, emotional distress, loss of enjoyment of life, and the strain on relationships. They often make up the largest part of a serious injury claim, which is why the coverage limit you carry matters so much. An injured person has to clear a legal threshold before collecting non-economic damages at all, covered below.
Excess Economic Losses
Michigan’s no-fault system routes most medical bills and wage loss through each driver’s own Personal Injury Protection, regardless of fault. PIP has caps, though. Work loss benefits are limited to a monthly maximum, and medical coverage depends on the PIP tier the injured person picked.4Michigan Legislature. Michigan Code 500.3107 – Expenses and Work Loss for Which Personal Protection Insurance Benefits Payable When the injured person’s actual losses run past their PIP, they can pursue the at-fault driver’s bodily injury coverage for the difference.5Michigan Legislature. Michigan Code 500.3135 – Tort Liability for Noneconomic Loss This has become more significant since the 2020 reform, because many drivers now carry capped PIP (at $50,000, $250,000, or $500,000) instead of unlimited lifetime medical.
What It Doesn’t Cover
Injuries you cause intentionally are excluded. Under Michigan law, if the harm was intentional, neither your liability coverage nor the injured person’s PIP will pay.5Michigan Legislature. Michigan Code 500.3135 – Tort Liability for Noneconomic Loss One exception: if you acted to prevent injury to yourself or someone else and knew harm was likely but weren’t trying to cause it, the exclusion doesn’t apply. The coverage also doesn’t pay for your own injuries or your own vehicle damage. Those sit with PIP and collision.
When the Injured Person Can Actually Collect
Not every injury opens the door to a bodily injury claim. To recover non-economic damages from an at-fault driver, the injured person must have suffered death, permanent serious disfigurement, or a serious impairment of body function.5Michigan Legislature. Michigan Code 500.3135 – Tort Liability for Noneconomic Loss This is the tort threshold. It keeps minor and short-lived injuries inside the no-fault PIP system and out of court. Soft-tissue strains that resolve in a few weeks typically don’t qualify.
The “serious impairment of body function” standard asks whether the injury is objectively observable, involves an important body function, and affects the person’s general ability to live their normal life. It does not have to be permanent, but the effect on daily life has to be real.
How Your Own Fault Affects a Claim
Michigan uses modified comparative fault. If an injured person was partly to blame, a court reduces their damages by their percentage of fault.6Michigan Legislature. Michigan Code 600.2959 – Comparative Fault Twenty percent at fault means a twenty percent cut.
The hard line is 50 percent. If the person claiming damages is more at fault than everyone else combined, they lose non-economic damages entirely. Economic damages above PIP are still available, reduced by the fault percentage, but pain and suffering disappears. The no-fault statute applies the same bar to bodily injury claims under MCL 500.3135.5Michigan Legislature. Michigan Code 500.3135 – Tort Liability for Noneconomic Loss
If a Judgment Goes Above Your Limits
Your insurer pays up to your policy limit and stops. Anything above that is yours to pay. The injured person can go after your savings, home equity, vehicles, investment accounts, and future wages. A severe crash with permanent injuries can produce a judgment in the hundreds of thousands, which is the practical reason the state requires a signed waiver before dropping to the $50,000/$100,000 floor. Drivers with real assets often carry limits well above the $250,000/$500,000 default and add an umbrella policy on top.
How This Differs from PIP
People mix these two up constantly because both deal with injuries from car crashes. They work in opposite directions.
PIP is first-party coverage. Your own insurer pays your medical bills, wage loss, and replacement services after any crash, no matter who caused it, with no need to prove fault or sue anyone.7Michigan Department of Insurance and Financial Services. Michigan Department of Insurance and Financial Services Quick Facts
Bodily injury liability is third-party coverage. It only triggers when you are at fault and someone else files a claim against you, and the money goes to that injured person. Both coverages are mandatory under Michigan law.8Michigan Legislature. Michigan Code 500.3101 – Security Required
Penalties for Driving Without It
Driving without the required insurance is a misdemeanor in Michigan, carrying a fine between $200 and $500, up to one year in jail, or both.9Michigan Legislature. Michigan Code 500.3102 – Security Required, Violations The criminal fine is often the smallest piece of it.
The civil penalty bites harder. If you are driving your own uninsured vehicle when another driver hurts you, you cannot recover any non-economic damages from that driver, no matter how bad the injury or how clear their fault.5Michigan Legislature. Michigan Code 500.3135 – Tort Liability for Noneconomic Loss In serious injury cases, that typically wipes out most of what the claim would have been worth.
Deadline to Sue
A bodily injury lawsuit against an at-fault driver has to be filed within three years of the date of injury or death.10Michigan Legislature. Michigan Code 600.5805 – Statute of Limitations, Periods of Limitation An insurance claim doesn’t stop the clock. Only a lawsuit filed with a court does. Miss it and the right to pursue the at-fault driver’s bodily injury coverage is gone.
PIP disputes run on a separate “one-year-back” rule tied to each expense, so the two deadlines operate independently. One can expire while the other is still open.