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Car insurance laws in Michigan

As a Michigan resident, you are required to carry car insurance and purchase coverage before you register your vehicle. However, before you get started, here is some important information to keep in mind:

No-fault insurance

Recently in 2019, Michigan became a no-fault insurance state. If you happen to get into a car accident, no-fault insurance will reimburse you for any hospital or medical expenses, wage losses from an inability to work, and if necessary, any funeral costs. No-fault insurance will cover these expenses regardless of who is responsible for the accident. It does not, however, cover any damage to your car.

Michigan teen driving laws

Young drivers are eager to get out on the road and experience that kind of freedom for the first time in their lives. To ensure safety on the road for everyone, it’s important to become familiar with the laws for new drivers in Michigan.

Drivers can get a Level 1 Learner’s License once they turn 14 years and 9 months old, and can get a Level 2 Intermediate License once they turn 16 years old and have been driving for at least six months with 50 supervised hours (including 10 hours at night). Restrictions are lifted once a driver turns 17 and receives a Level 3 Full License. You can learn more about being a young Michigan driver here..

Minimum insurance requirements for Michigan

The minimum amount of Michigan auto insurance coverage is $50,000/$100,000/$10,000. In the event of a covered accident, your limits for bodily injury are $50,000 per person, with a total maximum of $100,000 per incident. It also covers up to $10,000 for damage to another person’s property.

Liability coverage

As a resident of Michigan, there are two types of liability coverage your insurance policy must include: property damage and bodily injury.

  • Property damage safeguards your assets if you are found legally responsible for a covered accident. It covers certain damage you may cause to the property or vehicle of another party.
  • Bodily injury safeguards your assets if you’re found legally responsible for a covered accident, including certain expenses associated with bodily harm sustained by the other parties.

Liability coverage also provides for your legal defense if a lawsuit is brought against you as a result of a covered accident.

Property protection insurance

This coverage pays up to $1 million for damage your car does in Michigan to other people’s property, such as building and fences. It will also pay for damage your car does to other people’s properly parked vehicles.

Personal injury protection (PIP

Reimburses a portion of wage loss, medical expenses and essential services incurred as a result of an accident to eligible injured parties (i.e. passengers or pedestrians).

Optional Michigan insurance coverage

It’s often a good idea to add the following coverages to your policy so you can enjoy the security of being protected on the road:

Comprehensive

This type of Michigan auto insurance coverage is used to repair your vehicle when physical damage occurs from non-collision related incidents (subject to deductible). Such incidents include theft, fire, vandalism, glass breakage, and contact with animals.

Collision

Covers damage to your vehicle resulting from a collision with another vehicle or object (subject to deductible).

  • Broad collision covers damage to your vehicle resulting from collision with another vehicle or object, after you pay your deductible. If the driver of your insured vehicle was not substantially at-fault or parked in such a way to have caused an unreasonable risk of loss, the deductible amount will not be subtracted.
  • Limited collision coverage only applies if the driver of your insured vehicle was not substantially at fault.

Uninsured/underinsured motorist

Protects you in the event of an accident where the other party is at-fault and either doesn’t carry insurance or is underinsured.

  • Bodily injury helps pay for damages due to bodily injury that you and other passengers of your vehicle are legally entitled to from another driver who is not insured or is underinsured.

Tailor your policy with these options

Accident Forgiveness

With this optional coverage, Nationwide will not raise your auto insurance rates following your first at-fault automobile accident. Learn more about Accident Forgiveness.

Roadside Assistance

Nationwide Roadside Assistance coverage is available in two different levels, Basic and Plus, so you can choose the one that works best with your budget. Get covered for fuel delivery, lockout service, jump-starts and more.

Loss of use/rental car expense

If you can’t drive your car due to a covered loss, this coverage helps pay for a rental car or other transportation expenses so you can get back on the road.

What factors affect your car insurance rate?

Some car insurance rating factors, such as your driving record, can significantly impact your insurance costs. Below are the most common rating factors used to determine a low or high risk driver.

1. Your vehicle

The type of car you own can affect your car insurance rate. This will include car safety features, year and make, age of the vehicle, vehicle ownership and cost of repairing the vehicle.

2. Where you live

Car insurance rates vary by state and zip code. Each state has their own regulations and insurance coverage requirements.

3. Your characteristics

Your demographics such as age, gender, marital status, credit score and profession can impact your rate.

4. Driving history

Your driving history would include your driving record, how much you drive and years of driving experience.

What can increase my car insurance rate?

Once you find the right coverage, be sure to keep in mind the factors that can increase your rate.

1. Traffic violations

Traffic violations include minor and major violations such as speeding tickets, careless driving and DUIs.

2. At-fault accidents

At-fault accidents that result in large insurance claims may affect your premium.

3. Adding a driver to your policy

If someone else drives your car you should add them to your policy. Their driving record and driving history may increase your insurance rate.

4. Lapse in insurance

A lapse in car insurance is when you have a registered car but no car insurance. Going without car insurance in many states can make you a high-risk driver when purchasing car insurance.

What are the consequences of driving without car insurance?

Driving uninsured can result in varying penalties and is against the law in most states. The consequences of driving without insurance outweigh the monthly insurance premium and may result in the following penalties.

1. Fines

Fines vary by state and can add up to thousands of dollars if you are involved in an accident.

2. License suspension

Some states revoke or suspend your license if you are caught driving without insurance.

3. Vehicle impounded

In some states your vehicle may be towed and you will not be able to claim your car until you submit proof of insurance. Getting your car back will require additional impound and reinstatement fees.

4. Vehicle repair and medical costs

If you are uninsured and involved in an accident you have to pay out-of-pocket for damages and, depending on the severity of the accident, the costs can be very high. You could even be sued for bodily injury or property damage.

5. Increase in car insurance premium

Driving uninsured will make you a high-risk driver and this can increase your premium. Some states require an SR-22 document to prove you can meet the state’s minimum insurance requirements. Having an SR-22 will reflect poorly on your driving record.
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Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply.