michigan car insurance coverages
Michigan has some unique coverage options and requirements that set it apart from the other 49 states. We'll break down these unique coverages to help you better understand your Michigan car insurance policy.
Michigan's no-fault insurance
Michigan requires every driver to have no-fault coverage consisting of 3 parts: personal injury protection (PIP), property protection insurance (PPI), and residual liability insurance — bodily injury and property damage (BI/PD).
This triple layer of protection, unique to the Great Lake State, gives Michigan the distinction of having the most comprehensive no-fault coverage.
How no-fault car insurance works in Michigan
No-fault is designed to ensure that those injured in car accidents get medical attention right away. Since an injured party files a claim with his or her insurer, this insurance can avoid the sometimes lengthy process of determining fault to decide who pays for what.
In Michigan, no-fault covers personal injuries and other expenses. Here's how it works.
Personal injury protection
If you're injured in a car accident, PIP can help pay for medical bills, lost wages, and other injury-related costs. Where other no-fault states cap how much protection PIP will provide — New York, for instance, sets its limits at $50K per person, per accident — PIP in Michigan provides unlimited medical benefits. In other words, whether your medical bill was $1,000 or $1 million, you'd be fully covered (let's hope you never have to use it).
But that's not all PIP does in Michigan. Personal injury protection also provides up to 85 percent of your salary if you're unable to work (because of injuries) for up to 3 years. There is an annual limit, which changes yearly. As part of PIP, you're also entitled to $20 per day to help pay for replacement cost services like housekeeping or yard work.
Property protection insurance
If you get into a car accident that causes property damage (buildings, fences, parked cars, road signs, garden gnomes, etc.), property protection insurance provides up to $1 million in coverage.
Property protection insurance doesn't cover damage to your own car, to other cars involved in the accident, or to cars that were improperly parked (like a double-parked car). But it can kick in if you accidentally crash into a light pole which then falls onto a properly parked Honda.
Residual liability insurance — bodily injury and property damage
Since no-fault coverage provides a bevy of protection, it also limits the ability of drivers to file lawsuits against an at-fault driver. But if you are found liable for damages after an accident, residual liability insurance can step in to help pay for your legal fees and any other damage, up to a limit.
You can, of course, buy coverage with higher limits, but the minimum requirements are:
- $20,000 bodily injury per person
- $40,000 bodily injury per incident
- $10,000 property damage
Optional Michigan car insurance coverages
No-fault coverage in Michigan is robust, but it doesn't cover everything — like damage to your own car, for instance. Similar to other states, a number of optional car insurance coverages (like collision and comprehensive) are available to give you well-rounded financial protection. But unlike other states, Michigan's collision coverage, which can help pay for damage to your car after an accident, comes with 3 levels of protection. And the amount of collision coverage you get is determined based on fault.
Let's take a look at how it works.
Limited collision coverage
As its name implies, limited collision coverage only steps in under certain conditions. If you're 50 percent (or less) at fault in an accident, you'll have to pay a deductible and your insurer will likely cover the rest. If you're more than 50 percent at fault, your insurance won't pay to repair or replace your damaged ride.
So if you were rear-ended, you can generally count on limited collision to protect you. But if you were the rear-ender, you may be out of luck.
Standard collision coverage
Standard collision coverage in Michigan works the same as it does in other states. Whether you were 5 percent at fault or 95 percent, standard collision will help pay to repair or replace your car. All you'd have to pay is your collision deductible.
Broad form collision coverage
Of the 3 collision coverages, broad form insurance provides the highest level of protection. Like standard coverage, it'll help cover your car repairs regardless of the degree of fault. But unlike standard coverage, you won't need to pay a deductible if your degree of fault was 50 percent or less.
Not having collision coverage
If you choose to forgo collision, you'll be responsible for fixing damages to your car out-of-pocket. Even if an at-fault driver sideswiped you, the other driver's insurance won't pay for your dinged-up ride.
One more note: if you have a loan or you lease your car, your loan or leasing agent may require some form of collision coverage on your policy.
Understanding your Michigan car insurance options
Michigan car insurance laws are unique and complex. If you need help figuring out what kind of coverage to get, our Coverage Counselor®, an interactive insurance planning tool, can help. And of course, we also have real-life coverage counselors waiting to answer your questions. Just call 1-800-ESURANCE (1-800-378-7262) anytime, day or night.
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