The national Personal Auto Policy guide covers the ISO policy structure. Michigan is different from almost every other state. It has the country's most extensive no-fault system (chapter 31 of the Insurance Code, MCL 500.3101 and the sections after it). Every policy carries personal protection insurance (PIP), property protection insurance (PPI) and residual liability. Since the 2019 reform, drivers choose their PIP medical limit. This guide covers the Michigan rules.

Required security (MCL 500.3101)

• The owner or registrant of a vehicle that must be registered in Michigan has to carry PIP, PPI and residual liability. The security has to be in effect only while the vehicle is driven or moved on a highway. A stored vehicle may keep comprehensive only.
• "Motor vehicle" here means a vehicle with more than 2 wheels. Motorcycles, mopeds and ORVs are excluded and have their own rules.
• A person who leases or uses a vehicle for more than 30 days counts as an owner.
• Nonresidents need Michigan security if their vehicle is driven in Michigan more than 30 days in a calendar year (3102).
• Driving uninsured is a misdemeanor: a fine of $200–$500, up to 1 year in jail, or both (3102).
• Failing to show proof of insurance is a civil infraction. Proof may be paper or electronic. Knowingly producing false proof carries up to 1 year and/or $1,000 (MCL 257.328).
• Insurers issue one certificate of insurance per vehicle (3101a).

Residual liability limits (MCL 500.3009)

• If the insured makes no valid lower-limit choice, the 250/500 default applies.
• Named excluded drivers: the policy must warn that when an excluded person drives, all liability coverage is void. The excluded driver gets no PIP (3009(2), 3113(d)).
• UM and UIM are optional in Michigan. They aren't among the coverages 3101 requires.

PIP: benefits regardless of fault (3105, 3107)

• Allowable expenses (medical): reasonable charges for care, recovery and rehabilitation, up to the limit chosen.
• Work loss: for up to 3 years from the accident, reduced 15% for the tax advantage unless the claimant shows otherwise.
• Replacement services: up to $20 per day for up to 3 years.
• Funeral and burial: the policy amount, between $1,750 and $5,000.
• Survivor's loss: up to 3 years after the accident (3108).
• Wage loss, replacement services and funeral benefits stay in the policy even if PIP medical is reduced or opted out.
• A person 60 or older who wouldn't qualify for work loss can waive it for a lower rate (3107(2)).

PIP medical choices (3107c, 3107d)

• Qualified health coverage must not exclude auto injuries. Its deductible must be within the statutory cap, which is $6,579 for July 1, 2026–June 30, 2027. TRICARE and CHAMPVA qualify. VA coverage does not.
• If qualified health coverage ends, the named insured must get PIP medical within 30 days.
• The choice applies to the named insured, spouse and resident relatives.
• Benefits under multiple policies are capped at the highest single limit.
• Insurers must offer an attendant care rider above the limit for the lower options.
• A transportation network company may choose only $250,000, $500,000 or unlimited.
• Provider fees: for care after July 1, 2023, fees are capped at 190% of what Medicare pays, with higher caps for listed providers (3157).
• Premium reductions: the 2019 reform required average PIP premium reductions of 45%, 35%, 20% and 10% for the $50,000, $250,000, $500,000 and unlimited options (2111f).

Who pays PIP (3114, 3115)

• Your own policy covers you, your spouse and resident relatives.
• An employee in an employer-furnished vehicle claims from that vehicle's insurer.
• A pedestrian with no policy in the household claims through the assigned claims plan.
• Motorcyclists: the insurer of the motor vehicle involved pays first. Motorcycle policies must offer medical coverage in $5,000 increments (3103).
• No PIP for:
  • someone knowingly using a stolen vehicle
  • an uninsured owner
  • a named excluded driver (3113)

Claims timing

• PIP is overdue if unpaid 30 days after reasonable proof. Overdue PIP bears 12% interest (3142).
• Suit must be filed within 1 year of the accident, unless notice was given or PIP was paid within that year. Recovery is limited to losses from the year before suit (3145).

Property protection insurance (3121, 3123)

• PPI pays, without regard to fault, for damage your vehicle does to others' tangible property in Michigan, such as buildings, fences and properly parked cars.
• The limit is $1,000,000 per accident.
• PPI doesn't cover:
  • moving vehicles and their contents
  • accidents outside Michigan
  • property of the insured, spouse or relative who owned or drove a vehicle involved

The tort threshold and mini-tort (3135)

• You can sue for noneconomic loss (pain and suffering) only for death, serious impairment of body function or permanent serious disfigurement.
• A serious impairment is objectively shown, affects an important body function, and affects the person's general ability to lead a normal life. There's no minimum duration.
• Comparative fault: damages are reduced by fault. A party more than 50% at fault gets no noneconomic damages.
• An uninsured driver of his or her own vehicle can't recover damages.
• Excess economic loss above PIP limits, the 3-year limit or the dollar caps can be recovered in tort.
• Mini-tort:
  • You may recover up to $3,000 for vehicle damage not covered by insurance from an at-fault driver, for accidents after July 1, 2020.
  • The suit goes to small claims court when possible.
  • Mini-tort coverage is optional.
  • Drivers with collision coverage generally recover only their deductible.

Collision choices (3037)

• Insurers must offer limited collision, which pays only when you're not substantially at fault, with no deductible.
• They must also offer broad form collision, which pays regardless of fault, with the deductible waived when you're not substantially at fault.
• "Substantially at fault" means more than 50% responsible (2104).
• Rejecting collision must be done in writing.

Industry mechanisms

• Michigan Catastrophic Claims Association (MCCA) (3104):
  • Every insurer writing no-fault security is a member.
  • The MCCA reimburses 100% of PIP losses above a statutory retention ($580,000 for July 2019–June 2021, adjusted every odd-numbered year by the lesser of 6% or CPI).
  • Reimbursement applies to unlimited PIP policies. Drivers with lower limits pay only a deficit fee.
• Michigan Automobile Insurance Placement Facility (MAIPF): all auto insurers participate. It provides coverage to drivers rejected by the voluntary market (3301).
• Assigned claims plan: pays PIP when no policy applies or can be identified, when insurers dispute it, or when an insurer can't pay. PIP medical is capped at $250,000 (3172).

Eligibility, rating and termination

Eligible person (2103)

• Insurers must write eligible persons. A person is not eligible if he or she:
  • has a suspended license
  • has more than 6 eligibility points in 3 years (for example, 4 points for driving more than 15 mph over the limit)
  • has a drunk-driving or other listed conviction in 3 years
  • has an insurance fraud conviction in 5 years
• A driver can't be refused or charged more solely because of reaching 65 while still holding a valid license (3021).

Rating (2111)

• Auto rates may not use sex, marital status, home ownership, education, occupation, ZIP code or credit score. Rating territories are still allowed.
• Surcharges apply for substantially at-fault accidents and violations.
• Drivers 50 or older who complete a qualifying course may get a discount for 3 years (2111a).

Agent duties (2116)

• Give every eligible person a quote.
• Disclose how many insurers you represent.
• Don't steer applicants away from an insurer.

Termination

• Chapter 32:
  • After a policy has been in force 55 days, it may be cancelled only for nonpayment or for suspension or revocation of the license of the named insured or a regular household driver (3220).
  • Cancellation notice goes by certified mail at least 20 days ahead. It must state the right to appeal to DIFS within 7 days (3224).
  • A nonrenewal needs a first-class notice 20 days ahead, or it's treated as a cancellation (3204).
  • Chapter 32 doesn't apply to nonpayment cancellations (3212).
• Chapter 21: except for nonpayment and new policies, a home or auto termination needs written notice at least 30 days ahead, stating each specific reason. A notice mailed within the first 55 days may take effect in 20 days (2123).

Common exam traps

• Michigan requires PIP + PPI + residual liability. UM and UIM are optional.
• Default BI limits: 250/500. The lowest allowed: 50/100. PD: $10,000, which pays out of state.
• PIP medical has six choices. Unlimited is the default. Opting out requires Medicare A and B.
• Work loss and replacement services last 3 years. Replacement services: $20/day.
• PPI: $1 million, Michigan only. Mini-tort: $3,000.
• More than 50% at fault = no noneconomic damages.
• The MCCA reimburses insurers, not drivers directly.