Like most states, there are basic requirements when it comes to auto insurance. Michigan car insurance coverage has to be at least what is called no-fault coverage. With three parts to every plan that comprises a no-fault plan; the PIP, the PPI and the BI/PD. Each of these elements will be explained in detail, but know that in Michigan, every vehicle must have at the very least these amounts in coverage to be considered legal.
PIP: Personal Injury Protection
This coverage pays for medical costs and lost wages that are incurred as the result of an accident involving the covered vehicle. It also has to cover these expenses for at least a three year period.
PPI: Property Protection
Michigan car insurance requirements states that policies must pay up to $1 million in damages when your vehicle damages someone else’s personal property. This does not include other vehicles per say, but objects such as mail boxes, fences, buildings, etc.
BI/PD: Residual Bodily Injury and Property Damage Liability
Often shorthanded down to 20/40/10 coverage, what this means is that you must have coverage that pays $20,00 per person injured/killed per accident up to $40,000 per accident if multiple people are involved, and up to $10,000 in damages for the other vehicle. You have the option to purchase higher coverage amounts, but these are the bare minimums you must have to be considered legally covered in the state of Michigan.
Optional Michigan Insurance Options
Beyond the basic no-fault coverage required, drivers have the same options as any those in other other state to have additional coverage to additionally protect themselves against under or uninsured drivers. Some of the more popular options that Michigan car insurance holders purchase include the following:
Collision and Comprehensive
Since the basic requirements do not have provisions that pay for damages done to your vehicle and the other person, if there was one, may not particularly cover the value of your vehicle, many drivers op for collision and comprehensive. This coverage have varying amounts of protection but pretty much will cover repairs and replacement of the vehicle provided damage is incurred under acceptable circumstances.
Uninsured and Under insured Motorists (UM/UIM
The other type of additional coverage that Michigan car insurance holders opt for is coverage to help compensate for the 20/40/10 limits. For many people who drive newer vehicles, the limit of $10,000 for damages will not cover their vehicle if they get into a wreck that totals the vehicle. For time where people carry only the minimal, less than, or non at all, as not everyone obeys the laws, the option of adding additional coverage to your policy is an option in Michigan.