Michigan Car Insurance

Michigan is a state that has very specific and strict regulations on automobile insurance. In fact, some insurance companies that sell car insurance around the country have specific agents and adjusters who deal specifically with Michigan because it is the most comprehensive no-fault state in the country with legislation that is known to make even attorneys cringe. When looking for the best rates for Michigan car insurance you first need to understand what is required by law before looking into optional coverages. After that you may want to see what you can do to ensure that you are qualified for any discounts which may be available.

Penalties of Being Uninsured in Michigan
Most states have strict regulations regarding mandatory insurance, but Michigan is in a league of its own. Penalties for not carrying insurance could result in a fine which could range anywhere from $200 to $500. However, the penalty doesn’t stop there. You could also be convicted of a misdemeanor and sentenced to as much as 1 year jail time. In some extreme cases you could get both a fine and jail time!

Three Types of Coverage Mandatory
State law requires that you carry three types of insurance in the state of Michigan which include Personal Injury Protection (PIP), Property Protection (PPI) and Residual Bodily Injury and Property Damage Liability Insurance (BI/PD). While most states only make BI/PD mandatory, no-fault states have much stricter regulations and as a result, insurance can be much more expensive.

Personal Injury Protection (PIP)
This is the part of a no-fault insurance policy that pays medical costs plus as much as 85% of income you would have been bringing in if not for being hurt in an accident for a period not to exceed 3 years. Each year the maximum compensation for lost wages is likely to be revised. As of October 1, 2010 the maximum monthly compensation for lost wages is $4,929. If the accident results in your death, those same benefits would go to your dependents, based on what they would have received from your income if you were alive. One other feature of PIP on a no fault policy in Michigan is a $20/day entitlement for replacement services for things you are not able to do for yourself as a result of injury in the accident.

Property Protection (PPI)
Should you be involved in an accident and your vehicle does damage to the property of another person, this portion of the policy kicks in to cover those losses. Under Michigan no-fault insurance laws that coverage is up to $1,000,000 total for damages to such things as buildings, fences, yards and even government owned property such as telephone poles, fire hydrants and street signs. PPI does not cover damage done to other vehicles unless they are legally parked.

Residual Bodily Injury and Property Damage Liability Insurance (BI/PD)
This is the portion of Michigan car insurance that gives most consumers trouble understanding. For the most part, BI/PD will prevent the driver from being sued except under some very specific circumstances which include:

  • At fault in an accident resulting in death, serious injury or permanent disfiguration
  • In an accident with non-resident occupying a vehicle not registered in Michigan
  • Involved in an accident in any other state
  • Up to $500 maximum if at least 50% or more at fault and the other vehicle is not insured

If you are not at fault and expect to have damages to your vehicle paid for in Michigan you should make absolutely certain you carry automobile insurance. Unless it is a minor ‘fender bender,’ most often the cost of repairs are much, much higher than that!

While Michigan car insurance can be more expensive than automobile insurance in other states, it is also more costly not to carry any. There are ways to qualify for discounted policies such as safe driving records and buying multiple types of insurance from the same company, but to find the lowest cost insurance possible it would be best to compare rates from several different companies.

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