Michigan Car Insurance Requirements: Minimums, Fault Rules & Penalties

Minimum liability requirements

Michigan requires all registered vehicles to carry three types of coverage, with PIP being the most distinctive element of the state's system.

Coverage	Minimum limit
Bodily injury per person	$20,000
Bodily injury per accident	$40,000
Property damage per accident	$10,000 (mini-tort)
Personal Injury Protection (PIP)	Chosen level (see below)
Property Protection Insurance (PPI)	$1,000,000

Michigan's property damage liability covers damage you cause to other people's property in another state. Within Michigan, a separate mechanism called the mini-tort allows the other driver to claim up to $3,000 from your insurer for their out-of-pocket vehicle damage not covered by their own collision coverage — provided they are less than 50% at fault. Property Protection Insurance (PPI) covers property damage you cause in Michigan (to other vehicles, buildings, fences, etc.) up to $1 million.

No-fault system and the PIP choice framework

Michigan is a no-fault state and one of the most complex in the country. The 2019 Michigan auto insurance reform, which took effect in 2020, introduced a tiered system that allows drivers to choose their Personal Injury Protection (PIP) benefit level rather than being required to carry unlimited PIP as was previously mandated.

The five PIP options are:

PIP level	Who may choose it
Unlimited	Any driver
$500,000 per person, per accident	Any driver
$250,000 per person, per accident	Any driver
$50,000 per person, per accident	Medicaid enrollees only
Opt-out	Medicare Parts A and B enrollees only

PIP covers your own medical expenses, rehabilitation costs, wage loss (up to a statutory maximum), and replacement services. Coverage extends to household members and passengers in your vehicle, not just the policyholder. Each person covered may have their own PIP limit based on their own policy or household policy.

Choosing the right PIP level matters. Unlimited PIP ensures there is no ceiling on medical coverage for catastrophic injuries — especially relevant given Michigan's history of severe auto accident injuries and long-term care costs. Lower PIP tiers reduce premiums but shift more financial risk to the policyholder. Drivers should consider existing health insurance coverage, access to employer-sponsored plans, and the needs of household members before selecting a reduced tier.

Third-party tort claims

Because Michigan is a no-fault state, lawsuits against the at-fault driver are restricted. A tort claim is permitted only when the injured person suffers:

• Serious impairment of a body function — an objectively manifested impairment of an important body function that affects general ability to lead a normal life
• Permanent serious disfigurement
• Death

If injuries do not meet this threshold, your PIP coverage is your primary — and often only — remedy. The 2019 reform narrowed the definition of serious impairment, which has the effect of keeping more cases within the no-fault system and fewer in litigation.

SR-22 requirements

An SR-22 is a certificate of financial responsibility filed by your insurer with the Michigan Secretary of State (SOS). Michigan requires an SR-22 after:

• A DUI or OWI (Operating While Intoxicated) conviction
• A reckless driving conviction
• License suspension or revocation for serious violations
• Certain uninsured driving incidents

The required filing period is 3 years of continuous coverage. A lapse during the SR-22 period triggers an SOS notification and typically restarts the suspension. Drivers in the SR-22 category are often placed with non-standard insurers; rates tend to decline as the clean driving record extends.

Penalties for driving without insurance

Michigan applies penalties to both the driver and the vehicle, with escalating consequences for repeat violations.

First offense:

• Fine up to $500
• Driver's license suspended for 30 days
• 2 points added to driving record
• Vehicle may be impounded

Second offense within 7 years:

• Fine up to $1,000
• Driver's license suspended for 1 year
• Additional points and reinstatement requirements

Reinstatement after suspension requires proof of current insurance, payment of a reinstatement fee to the Secretary of State, and satisfaction of any SR-22 filing obligation triggered by the underlying violation.

Michigan's no-fault system means that driving uninsured affects not only your liability exposure but also your access to PIP benefits. An uninsured driver involved in an accident in Michigan cannot access the PIP system and may be personally liable for their own medical costs in addition to facing the statutory penalties above.