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In Michigan, it is illegal to drive without liability insurance. Liability insurance in Michigan is sometimes referred to as “Michigan No Fault Insurance”. Michigan's no-fault law became effective October 1, 1973. It was created by state lawmakers to:
- Assure that persons injured in auto accidents are compensated quickly and equitably ... for medical costs and lost wages.
- Limit lawsuits so that benefits could be paid quickly.
Under Michigan’s no fault system accident victims can quickly receive payment for their losses. This is because settlements can be made without the time and expense of a lawsuit.
Liability Insurance
If you have an accident, liability insurance pays for damages to the other person and their property. Auto insurance in Michigan has set minimum liability limits. In Michigan drivers must have liability coverage of at least:
- $20,000 bodily injury liability for 1 person
- $40,000 bodily injury liability for all injured in one accident
- $10,000 property damage liability
Proof of Insurance
If you drive in Michigan you must always have proof of financial responsibility in the vehicle. You can verify proof of insurance with an insurance identification card showing that either you or the car is insured. The insurance identification card must provide the name of the insurance company, the policy number, and the policy’s effective date and expiration date. If you are stopped by a police officer and cannot show proof of insurance, the state will consider it a traffic infraction.
You will also need to provide proof of insurance to have your vehicle registered. The Secretary of State will not replace or renew you vehicle license plates unless you provide proof of insurance.
Penalties for Driving Without Insurance
As of September 2010, driving with no proof of insurance is a Category 2 Offense. The fine can be $200 or $500, and a driver must pay the fee for two consecutive years. Penalties may also include one year in jail or a 30-day driver's license suspension. Full coverage Auto Insurance
Optional Auto Insurance Coverage’s
The state of Michigan only requires driver to carry auto liability insurance. Most drivers want addition coverage’s to protect themselves and their automobile. Collision and Comprehensive insurance are designed to do just that. Collision Auto Insurance<./p>
Collision Coverage
If you are in an accident collision insurance, pays for the damage to your car over and above your deductible. Collision insurance is not required by the state of Michigan, but may be required by you bank or lien holder if you took a loan for your car or lease your car. When you purchase collision coverage be sure not to pay for coverage that exceeds the cash value of your vehicle.
Comprehensive Auto Insurance
Comprehensive auto insurance protects your car from events like theft, fire, vandalism, storms or other acts of God. While comprehensive insurance is not required by the state of Michigan, it will generally be required by the bank or lien holder, if you have a loan for your car or lease your car. When you purchase comprehensive insurance be sure not to pay for coverage that exceed the cash value of your vehicle.
Rental Car Insurance
In Michigan all vehicles must carry liability insurance.. This includes rental cars. If you are renting a car for pleasure, most personal auto insurance policies provide at least the minimum auto liability requirements. In most cases, the same coverage and deductibles you carry on your car will apply. Check with your insurance policy for details. If you use a credit card to rent a car, it may also cover the minimum liability amounts. If neither your personal insurance, or your credit card cover your rental insurance you can buy insurance from the rental company.
Average Insurance Cost
According to carinsurance.com, in 2010 the average cost of vehicle insurance in Michigan is $2,029.00. This is somewhat higher that the national average of $1,577.00.