Michigan Auto Insurance: 250/500 by Default

Michigan is a no-fault state requiring 50/100/10 liability plus PIP coverage. Learn the unique no-fault rules, 2020 reform changes, and recommended coverage levels.

Quick Answer: What Michigan Actually Requires

Michigan is a no-fault insurance state, and the number most drivers are quoted is not the number the law defaults to.

Coverage Type	Statutory floor	What you get by default
Bodily Injury per Person	$50,000	$250,000
Bodily Injury per Accident	$100,000	$500,000
Property Damage	$10,000	$10,000
Personal Injury Protection (PIP)	Required (you choose the level)	Required
Property Protection (PPI)	$1,000,000	$1,000,000

Michigan's liability floor is written as 50/100/10 — but since 1 July 2020 an insurer must issue your policy at $250,000/$500,000 unless you sign a Bodily Injury selection form choosing lower limits. If you never signed one, you are carrying 250/500, not 50/100, and you are paying for it.

That makes "the Michigan minimum" a misleading way to shop. The floor is what you may opt down to; the default is what you have.

Understanding Michigan's No-Fault System

Michigan operates under a "modified no-fault" insurance system, which differs significantly from traditional at-fault states.

How No-Fault Works

After an accident:

Your own insurance pays your medical bills (regardless of who caused the accident)
Your own insurance pays lost wages (up to policy limits)
You cannot sue the other driver for these expenses (with limited exceptions)
Property damage claims follow fault (not no-fault)

The trade-off:

Faster claims payment without proving fault
Medical bills covered immediately
Limited lawsuits reduce court costs
Can lead to higher premiums overall

When You Can Sue Under No-Fault

Michigan's "threshold" for lawsuits allows you to sue the at-fault driver for:

Death
Serious impairment of body function
Permanent serious disfigurement

You cannot sue for minor injuries or "pain and suffering" below this threshold.

Required Michigan Auto Insurance Coverages

1. Bodily Injury Liability (50/100)

This covers injuries you cause to others when you're at fault:

Limit	Purpose
$50,000 per person	Maximum payout per injured person
$100,000 per accident	Maximum total per accident

When it applies:

Accidents in other states
Accidents meeting Michigan's lawsuit threshold
Out-of-state drivers injured by you in Michigan

2. Property Damage Liability ($10,000)

Covers damage you cause to others' property:

Vehicles you hit
Buildings and structures
Fences, signs, guardrails

Important: Michigan's $10,000 minimum is extremely low. Average vehicle damage exceeds this easily.

3. Personal Injury Protection (PIP)

Michigan's no-fault PIP is unique and was reformed in 2020:

Coverage options (since July 2020):

PIP Level	Coverage
Unlimited	Full medical coverage for life
$500,000	High coverage option
$250,000	Mid-level coverage
$100,000	Lower coverage option
$50,000	Minimum coverage (Medicaid recipients only)
Opt-out	For those with qualified health insurance

PIP covers:

All medical expenses from auto accidents
85% of lost wages (up to 3 years)
Replacement services (household help)
Survivor's loss benefits

4. Property Protection Insurance (PPI)

Required: $1,000,000 coverage

Covers damage your vehicle causes to others' property in Michigan:

Parked cars you hit
Buildings and structures
Lawns, fences, signs

Does not cover:

Damage to moving vehicles (handled by their own insurance)
Intentional damage

5. Residual Liability Insurance

Extra protection beyond no-fault limits:

Coverage	Minimum Required
Residual Bodily Injury	$50,000 / $100,000
Residual Property Damage	$10,000

This applies when someone can sue you under Michigan's threshold.

The 2020 No-Fault Reform

Michigan reformed its no-fault system effective July 1, 2020:

Before Reform (Pre-2020)

Unlimited lifetime medical benefits required
Most expensive auto insurance in the nation
No choice in PIP coverage levels

After Reform (2020+)

Choice in PIP levels (unlimited to opt-out)
Rate reductions required based on PIP selection
Fee schedules for medical providers
8-year limit on attendant care by family members

Required Rate Reductions

PIP Level Selected	Minimum Rate Reduction
Unlimited	0%
$500,000	20%
$250,000	35%
$100,000 (Medicaid)	45%
$50,000 (Medicaid)	45%
Opt-out	45%

Penalties for Driving Uninsured in Michigan

Michigan takes uninsured driving seriously:

Criminal Penalties

Offense	Penalty
First offense (misdemeanor)	Up to $500 fine and/or 1 year jail
Second offense	Up to $1,000 fine and/or 1 year jail
Subsequent offenses	Increased penalties

Administrative Penalties

Consequence	Duration/Amount
License suspension	Until insurance obtained
Plate confiscation	Until compliance
Reinstatement fee	$125
Vehicle impoundment	Possible

Civil Consequences

If you cause an accident while uninsured:

No PIP benefits for your own injuries
Can be sued for the full amount of damages
Personal liability for all medical costs
Cannot sue others for non-economic damages

Recommended Coverage for Michigan Drivers

Given Michigan's unique system, consider higher coverage:

Minimum Practical Coverage

Coverage	Recommended Level
Bodily Injury	$100,000 / $300,000
Property Damage	$100,000
PIP	Unlimited or $500,000
UM/UIM	Matching liability limits

Why Higher Limits Matter

Property damage:

Michigan's $10,000 minimum is dangerously low
Average new car costs $48,000+
Multi-vehicle accidents easily exceed minimums

Bodily injury:

Serious injuries can exceed $100,000
Lawsuits for threshold injuries can be substantial
Protects your assets from judgments

PIP coverage:

Medical costs can be catastrophic
Unlimited coverage provides best protection
Lower levels may leave you underinsured

Additional Coverages

Uninsured/Underinsured Motorist (UM/UIM)

Not required but strongly recommended
Covers you when hit by uninsured drivers
Important for threshold injuries (pain/suffering)

Collision and Comprehensive

Not required but recommended
Required if you have a car loan
Collision: Accident damage to your vehicle
Comprehensive: Theft, weather, vandalism

Michigan-Specific Rules

Mini-Tort Claims

Michigan allows "mini-tort" claims for vehicle damage:

Detail	Requirement
Maximum claim	$3,000
Against	At-fault driver
For	Your deductible and uninsured damage
Requirement	Must have collision coverage

This allows limited property damage recovery from at-fault drivers.

Coordination of Benefits

PIP coverage can coordinate with health insurance:

Primary options:

Auto insurance pays first (higher premiums)
Health insurance pays first (lower auto premiums)

Considerations:

Health insurance may have limitations auto doesn't
Wage loss and replacement services only from auto
Must notify insurer of coordination choice

Out-of-State Accidents

Michigan coverage applies differently outside Michigan:

Location	Coverage Application
Other U.S. states	Liability applies; PIP varies
Canada	Specific rules apply
Out-of-state visitors to MI	Their policy plus Michigan minimums

How Much Does Michigan Auto Insurance Cost?

Michigan historically had among the highest rates in the nation:

Average Annual Premiums

Coverage Level	Average Annual Cost
State minimum	$1,200 - $2,000
Standard (with unlimited PIP)	$2,500 - $4,000
Full coverage (unlimited PIP)	$3,500 - $6,000

Post-Reform Savings

Rates have decreased since 2020 reform:

PIP opt-out can save 45% or more
Choosing $250,000 PIP saves ~35%
Actual savings depend on your insurer

Factors Affecting Your Rate

PIP coverage level selection
Age and driving experience
Location (Detroit rates highest)
Driving record
Credit history (limited use in MI)
Vehicle type and value
Coverage levels chosen

Frequently Asked Questions

Why is Michigan auto insurance so expensive?

Michigan's no-fault system historically required unlimited lifetime medical benefits, driving up costs. The 2020 reform aimed to reduce rates by offering PIP coverage choices. Additionally, high uninsured rates in urban areas and litigation costs contribute to higher premiums.

Can I opt out of PIP coverage?

Yes, if you have qualifying health insurance that covers auto accident injuries. You must have Medicare, Medicaid, or a health plan covering auto accident injuries. Opting out saves money but leaves you relying solely on health insurance for accident injuries.

What happens if I'm hit by an uninsured driver?

Your own PIP coverage pays your medical bills regardless. For vehicle damage, you'd file with your collision coverage if you have it. Without collision coverage, you may need to sue the uninsured driver directly for property damage.

Does Michigan require uninsured motorist coverage?

No, UM/UIM coverage is optional in Michigan. However, insurers must offer it, and given the state's uninsured driver rate, it's highly recommended for protecting against threshold injuries where you might sue.

How do I choose my PIP coverage level?

Consider:

Your health insurance coverage and willingness to rely on it
Risk tolerance for catastrophic injuries
Budget for premiums
Whether you have dependents

Unlimited coverage offers the most protection but costs more. Lower levels save money but shift risk to you.

What's the mini-tort rule?

Mini-tort allows you to recover up to $3,000 from an at-fault driver for your vehicle damage (typically your deductible or uninsured loss). You must have collision coverage to make a mini-tort claim.

Key Takeaways

Michigan requires 50/100/10 liability plus PIP, PPI, and residual coverage
No-fault system means your insurance pays your medical bills
2020 reform allows PIP coverage choices (unlimited to opt-out)
PIP choice affects rates with reductions up to 45%
State minimum property damage ($10,000) is dangerously low
Uninsured driving is a misdemeanor with fines and jail time
Recommended: Higher liability limits and UM/UIM coverage

Important Disclaimer

This guide provides general information about Michigan auto insurance requirements based on publicly available sources. This is not legal or insurance advice. The no-fault system is complex, and requirements can change.

Always verify current requirements with the Michigan Secretary of State and Department of Insurance and Financial Services (DIFS). Consult with a licensed insurance professional for advice specific to your situation.

Last verified: August 2026

Sources: Michigan Secretary of State, Michigan Department of Insurance and Financial Services, Michigan No-Fault Insurance Law

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