Michigan law requires every registered vehicle driven on public roads to carry three coverages: personal injury protection (PIP), property protection insurance (PPI), and residual bodily injury and property damage liability.1Michigan Legislature. Michigan Compiled Laws Section 500.3101 The minimum auto insurance required in Michigan sets a liability floor of $50,000 per person and $100,000 per accident for bodily injury, $10,000 for property damage caused in another state, automatic PPI of up to $1 million for in-state property damage, and a PIP medical level you select from a menu of tiers. Those are the legal minimums. Whether they are enough protection is a different question.
Residual Bodily Injury and Property Damage Liability
Even inside Michigan’s no-fault system, you need liability coverage for the situations where another driver can still sue you or where you cause damage outside the state. Since 2020, auto policies default to $250,000 per person and $500,000 per accident for bodily injury, plus $10,000 for property damage caused in another state.2Michigan Department of Insurance and Financial Services. Choosing Bodily Injury Coverage Those are the limits your insurer will write unless you specifically ask for something else.
You can request lower limits, but not below the statutory floor of $50,000 per person and $100,000 per accident for bodily injury and $10,000 for out-of-state property damage.3Department of Insurance and Financial Services. Michigan Choice of Bodily Injury Liability Coverage Limits The property damage number only applies out of state because in-state property damage runs through PPI and the mini-tort instead.
A note on the floor: if you cause an accident that seriously injures someone and a jury awards damages beyond your policy limits, you pay the difference personally. Medical costs have risen; the statutory minimums have not.
Personal Injury Protection
PIP pays your own medical bills, lost wages, and replacement services after an accident regardless of fault. The benefit rules are set by statute and apply at every coverage level: work loss benefits run for up to three years after the accident (reduced by 15 percent to account for being tax-free, with a monthly cap that adjusts for cost of living), replacement services pay up to $20 per day for up to three years, and funeral and burial costs are covered between a $1,750 floor and a $5,000 ceiling.4Michigan Legislature. Michigan Compiled Laws Section 500.3107
The piece you choose is the PIP medical cap — the most your insurer will pay per person per accident for medical expenses.
Choosing a PIP Medical Level
Michigan now offers several tiers, and your eligibility for the lower ones depends on your health coverage:5Michigan Department of Insurance and Financial Services. Choosing PIP Medical Coverage
- Unlimited PIP medical, open to any driver.
- $500,000, open to any driver.
- $250,000, open to any driver.
- $250,000 with exclusions, where you can exclude PIP medical for yourself if you have non-Medicare health insurance covering auto injuries, or for household members with their own qualifying coverage.
- $50,000, available only if you are enrolled in Medicaid and every household member has Medicaid, other health insurance, or a separate auto policy covering PIP.
- Full opt-out, available only if you have Medicare Parts A and B, with household members covered by their own auto policy or health insurance covering auto injuries.
Lower tiers reduce premiums, but anything above the cap comes out of your pocket. Catastrophic injuries routinely generate six- and seven-figure hospital bills, and standard health insurance does not always cover auto-accident injuries the way people assume.
One procedural detail matters if you take a tier that depends on health coverage: if you or an excluded household member loses that qualifying health coverage during the policy term, you must notify your auto insurer within 30 days. Miss the window and have an accident, and you may not be entitled to PIP medical benefits from any source, including the Michigan Assigned Claims Plan.6Michigan Department of Insurance and Financial Services. Bulletin 2023-17-INS – Qualified Health Coverage Under the No-Fault Act
Property Protection Insurance
PPI pays for damage you cause to other people’s property in Michigan — buildings, fences, parked vehicles, and the like — up to $1 million per accident.7Michigan Legislature. Michigan Compiled Laws Section 500.3121 It applies regardless of fault and is automatic in every Michigan no-fault policy. You do not pick a limit for PPI; the $1 million comes standard.
PPI does not cover damage to other moving vehicles. In-state vehicle damage runs through the other driver’s collision coverage or the mini-tort process, and property damage caused outside Michigan runs through your residual property damage liability.
What Isn’t Required but Is Easy to Assume Is
Three common coverages are not part of Michigan’s minimum. Collision and comprehensive, which repair or replace your own vehicle, are optional. So is uninsured motorist (UM) coverage, which pays pain-and-suffering damages and excess PIP benefits when the driver who hit you has no insurance. UM must be added to your policy specifically.
If you only buy the minimum, an uninsured driver who injures you leaves you with no insurance recovery for pain and suffering unless you sue that driver personally and can actually collect.
Penalties for Driving Without the Required Coverage
Driving without the required insurance is a misdemeanor in Michigan. A conviction carries a fine of $200 to $500, up to one year in jail, or both. Your driver’s license is suspended indefinitely until you prove you have coverage and pay a $125 reinstatement fee. Your vehicle registration is also blocked — the Secretary of State will not renew, transfer, or replace it until you show proof of insurance and pay a separate $50 fee.
The civil consequences are worse than the criminal ones. If you are in an accident while uninsured, you cannot recover non-economic damages such as pain and suffering from anyone, even a driver who was entirely at fault.8Michigan Legislature. Michigan Compiled Laws Section 500.3135 You are also barred from the mini-tort process for your own vehicle damage, and you are personally liable for all damages to others that insurance would have paid.
Vehicles That Fall Outside the Requirement
Not every vehicle needs a no-fault policy. The insurance code’s definition of “motor vehicle” excludes farm tractors and other implements of husbandry that are not subject to vehicle registration.1Michigan Legislature. Michigan Compiled Laws Section 500.3101 The insurance obligation also only applies while a vehicle is driven or moved on a highway, so a vehicle kept exclusively on private property does not need active coverage.
Historic vehicles — those over 25 years old, owned solely as a collector’s item, and used only for club activities, exhibitions, tours, parades, and similar purposes rather than daily transportation — can be registered with the Secretary of State for a one-time $30 fee. They still need insurance, but Michigan law accepts a collector vehicle policy that specifically covers the vehicle as a collector’s item, including provisions for damage or loss. These policies are usually much cheaper than a standard auto policy because the vehicle is driven so little.