Michigan has its own set of unique car insurance laws and regulations (not quite music to your ears, we know). Don't worry, we'll explain things as simply as we can, starting with perhaps its most distinctive coverage: Michigan no-fault insurance.
3-part mandatory Michigan no-fault car insurance
Michigan law dictates that all drivers need no-fault insurance before they can register their cars.
This 3-pronged Michigan no-fault combo (as you might expect) is unique to this state.
Personal injury protection
Personal injury protection (PIP) pays for medical costs if you or your passengers are hurt in a car accident. It can also pay for lost wages, funeral expenses, in-home care, and other services.
The exact type of PIP you need on your Michigan auto insurance varies based on your health insurance policy.
- If you don't have health insurance, you'll add "PIP medical — primary" to your policy.
- If you do have health insurance that can kick in to pay for post-accident medical expenses, you can add "PIP excess — coordinated medical benefits" coverage to your policy. PIP excess can cover medical expenses above and beyond what your health plan can cover.
- If you have health insurance but it doesn't cover lost income after a car accident, you can add "PIP primary work loss benefits" to your policy.
- If you do have health insurance that covers lost income, you can add "PIP excess (coordinated) medical benefits" to your policy.
And if all that makes your head spin, fear not. Our customer service center stands by to help you get a quote or manage your policy at 1-800-ESURANCE (1-800-378-7262).
- Property protection insurance
Property protection insurance (PPI) can pay up to $1 million in property damage costs after an accident, regardless of fault. It can cover buildings, trees, road signs, and other things your car may strike in a crash. It doesn't pay for damage to any other cars involved in the accident.
- Residual bodily injury and property damage liability
No-fault car insurance generally protects you from liability, except in certain extreme cases. In these extreme cases, residual bodily injury and property damage liability can help pay defense costs and damages if you're found at-fault for an accident (up to your policy's limits). It can also cover you if you're in an accident outside of Michigan.
Michigan no-fault limit requirements
Your Michigan no-fault insurance policy needs to have the following coverages and limits, at a minimum:
- $20,000 bodily injury liability coverage per person
- $40,000 bodily injury liability coverage per incident
- $10,000 property damage liability coverage for accidents you cause outside of Michigan
- $1,000,000 property protection insurance for damage in Michigan
- Personal injury protection (no limit)
You'll typically see the bodily injury and property damage limits written as 20/40/10. Keep in mind, these are the bare minimums required by your state, and you can choose higher liability limits when you get your personalized quote.
How fault works in a no-fault state
Most states let you take legal action, if necessary, to recoup post-accident medical expenses when the other driver is at fault. Michigan, however, is 1 of 12 "no-fault" states that restrict your right to sue.
With Michigan no-fault, your own car insurance policy kicks in to cover accident-related medical expenses for you and your passengers. Only in extreme cases (severe injury or death) does fault re-enter the equation.
It's worth noting that no-fault insurance doesn't pay for damage to your own car (comprehensive and collision can take care of that).
Using your health insurance with PIP
You may be able to designate your personal health insurance policy as the primary source of medical payment if you're in an accident. That means PIP will kick in only after your health coverage limits are exceeded.
You'll still be required to carry PIP but you may be able to lower your overall premiums if you coordinate the 2 types of coverage this way.
Before taking this step, you may want to review your policy carefully to make sure it covers all injuries caused by car accidents. This includes whether it will pay for all hospitalization and other medical costs, deductibles, and additional accident-related expenses.