The minimum insurance coverage in Michigan is three mandatory policies on every registered vehicle: personal injury protection (PIP), property protection insurance (PPI), and residual bodily injury and property damage liability.1Michigan Legislature. Michigan Compiled Laws 500.3101 – Security for Payment of Benefits Within those three, you can pick limits down to a legal floor: as low as $50,000 in PIP medical if you qualify for the Medicaid-tier option, a fixed $1 million PPI set by statute, and bodily injury liability no lower than $50,000 per person and $100,000 per accident. You cannot register a vehicle without all three, and you cannot drop one while keeping the others.
Personal Injury Protection (PIP)
PIP pays your own medical expenses, lost wages, replacement services, and funeral costs after a crash, regardless of who caused it.2Michigan Legislature. Michigan Compiled Laws 500.3107 When you buy or renew a policy, you choose a medical coverage tier:3Michigan Legislature. Michigan Compiled Laws 500.3107c
- Unlimited lifetime medical benefits.
- $500,000 per person per accident.
- $250,000 per person per accident.
- $50,000 per person per accident, available only if you are enrolled in Medicaid and everyone in your household has qualifying health coverage, their own Medicaid enrollment, or separate no-fault PIP coverage.
- Opt-out, available under limited circumstances if you have qualified health coverage that would pay for auto accident injuries.
The lowest tier you qualify for is your personal minimum. Most drivers do not meet the Medicaid conditions for the $50,000 tier or the health-coverage conditions for opt-out, which makes $250,000 the practical floor. Choosing a lower tier reduces your premium, but once you hit the limit after a serious crash, any remaining medical bills become yours unless another insurer picks them up. Catastrophic auto injuries can run into the millions over a lifetime.
Residual Bodily Injury and Property Damage Liability
Bodily injury liability pays when someone sues you after a serious crash. Michigan’s no-fault system limits those lawsuits but does not eliminate them: an injured person can still sue you for pain and suffering and other noneconomic damages if they suffered death, serious impairment of body function, or permanent serious disfigurement.4Michigan Legislature. Michigan Compiled Laws 500.3135 – Tort Liability for Noneconomic Loss
The default on a new Michigan policy is $250,000 per person and $500,000 per accident. You can go higher, or lower to save on premium, but you cannot drop below $50,000 per person and $100,000 per accident.5Michigan Department of Insurance and Financial Services. Choice of Bodily Injury Liability Coverage Limits The property damage portion adds $10,000 for damage you cause to property in another state.6Michigan Department of Insurance and Financial Services. Choosing Bodily Injury Coverage Within Michigan, property damage is handled through PPI instead.
A single serious-injury lawsuit can blow through the $50,000/$100,000 floor quickly, and anything above your limits comes out of your own pocket.
Property Protection Insurance (PPI)
PPI is unique to Michigan. It pays up to $1 million for damage your vehicle causes to other people’s property inside the state — buildings, fences, parked cars, and the like. The limit is set by law, so there is no choice to make. The coverage applies regardless of fault.
PPI does not cover damage to another moving vehicle. That is handled through the other driver’s own collision coverage.
What Michigan Does Not Require
Uninsured and underinsured motorist coverage is optional in Michigan.7Michigan Department of Insurance and Financial Services. Your Guide to Automobile Insurance It pays when you are seriously injured by a driver who has no liability insurance or not enough of it, and policies typically start at $20,000 per person and $40,000 per accident. It does not pay for damage to your vehicle. Collision and comprehensive coverage for your own car are also optional under state law, though a lender will usually require them if you are financing or leasing.
Your PIP covers your own medical bills whether the other driver is insured or not, so skipping UM/UIM is not the same kind of exposure as skipping the three required coverages. The gap it fills is a lawsuit against an uninsured driver who has nothing to collect from.
The MCCA Assessment on Your Bill
The Michigan Catastrophic Claims Association (MCCA) reimburses insurers for very large PIP medical claims, and every insured vehicle pays an annual assessment that funds it. Your insurer passes the charge through on your premium.
For July 2026 through June 2027, the per-vehicle assessment depends on your PIP tier:8AAIS. MCCA Issues New Assessment Fee for 2026-2027
- Unlimited PIP: $84 per vehicle ($65 pure premium plus $19 deficit recoupment).
- All other PIP levels, including opt-out: $19 per vehicle, deficit recoupment only.
Choosing a tier below unlimited drops this line item from $84 to $19.
Penalties for Driving Without the Required Coverage
Operating a vehicle without the required insurance is a misdemeanor. The penalty is a fine between $200 and $500, up to one year in jail, or both.9Michigan Legislature. Michigan Compiled Laws 500.3102 The same charge applies if you knowingly let someone else drive your uninsured vehicle, or if you drive someone else’s vehicle knowing it is uninsured.
If an officer asks for proof of insurance and you cannot produce it, the law presumes your vehicle is uninsured. You can rebut that presumption by showing you actually had coverage, but the burden is on you. Your driver’s license and vehicle registration also face suspension, and reinstatement requires proof of current coverage and payment of applicable fees.
Insurers treat gaps in coverage as a risk factor, so premiums rise once you do get insured again, and some carriers will decline to write a policy at all.
What Happens If You’re Uninsured in a Crash
The financial consequences of being uninsured get much worse if you are actually in an accident. You can still receive PIP benefits through the assigned claims process, but the insurer that pays them can sue you to recover every dollar it spent on your care plus claims-handling costs.10Michigan Legislature. Michigan Compiled Laws 500.3177 If you don’t pay within 30 days of a judgment, your license and registration face suspension.
You also lose rights the no-fault system otherwise gives crash victims. If you were driving your own uninsured vehicle when injured, a court cannot award you noneconomic damages — pain and suffering — even if the other driver was entirely at fault.4Michigan Legislature. Michigan Compiled Laws 500.3135 – Tort Liability for Noneconomic Loss You are also barred from a mini-tort claim for vehicle damage. Carrying the state minimums is cheap compared with what happens if you skip them and then crash.