Michigan Car Insurance Requirements & Rates (2026)

Q: What are Michigan's minimum car insurance requirements?

Michigan requires a no-fault policy with three parts: Personal Injury Protection (PIP) medical coverage, Property Protection Insurance (PPI) of $1 million, and Residual Bodily Injury / Property Damage liability. The minimum bodily injury limits drivers may opt down to are $50,000 per person / $100,000 per accident, with a $10,000 minimum for out-of-state property damage liability. The statutory default — and the amounts that apply unless a written waiver is signed — are $250,000 per person / $500,000 per accident.

Q: Why is car insurance so expensive in Michigan?

Michigan has historically been the most expensive state for auto insurance because it was the only state that required unlimited lifetime PIP medical coverage for all drivers. Even after the 2020 reform introduced lower PIP tiers, the no-fault system, mandatory $1 million Property Protection Insurance, and historically high medical cost trends keep Michigan premiums well above the national average.

By Brad Burton, Founder & Editor·Updated June 2026·How we research this

Car Insurance in Michigan: What You Need to Know

Michigan operates under a no-fault auto insurance system, which means your own policy pays your medical expenses after an accident regardless of who caused it. This structure, combined with mandatory Personal Injury Protection (PIP) coverage and a $1 million Property Protection Insurance requirement, has historically made Michigan the most expensive state in the country for auto insurance.

A landmark 2019 reform law (Public Act 21 of 2019), effective July 1, 2020, gave drivers the ability to choose a PIP medical coverage level for the first time, replacing the previous mandatory unlimited PIP requirement. The law also restructured liability limits and introduced new non-driving-factor restrictions. Understanding these rules is essential before you buy or renew a policy.

Michigan Minimum Coverage Requirements

Every Michigan driver must carry a no-fault insurance policy with three required components. The table below shows the legally required minimums.

Coverage Type	Minimum Required	Notes
Bodily Injury (BI) — per person	$50,000	Floor limit; requires written opt-down waiver
Bodily Injury (BI) — per accident	$100,000	Floor limit; requires written opt-down waiver
Property Damage (PD) — out-of-state	$10,000	Applies to accidents outside Michigan only
Property Protection Insurance (PPI)	$1,000,000	Covers damage to others' property in Michigan
Personal Injury Protection (PIP)	See PIP tiers below	Six levels available; unlimited is default

Important: The statutory default Bodily Injury limits are $250,000 per person / $500,000 per accident. To purchase lower limits ($50,000/$100,000), a driver must sign a director-approved written waiver. The $50,000/$100,000 figures are the legal floor — not the default. Verify current requirements at michigan.gov/difs.

What Drives Michigan Premiums: No-Fault & PIP Tiers

The core reason Michigan premiums have been the nation's highest is the no-fault system's PIP requirement. Before July 2020, every policy automatically included unlimited lifetime medical coverage — meaning insurers paid all "necessary and reasonable" medical bills for an injured driver with no dollar cap, ever. That exposure produced premiums far above every other state.

The 2020 reform introduced six PIP medical tiers. Every Michigan driver now chooses one at policy purchase:

PIP Tier	Medical Coverage Limit	Who May Choose It
Unlimited	No dollar cap — lifetime coverage	Any Michigan driver (default)
$500,000	$500,000 per person per accident	Any Michigan driver
$250,000	$250,000 per person per accident	Any Michigan driver
$250,000 with exclusion	$250,000 (household member excluded)	Drivers whose excluded member has qualified health coverage (non-Medicare/Medicaid)
$50,000	$50,000 per person per accident	Medicaid recipients only
No PIP medical	$0 — no PIP medical benefit	Medicare Parts A & B enrollees only

Caution: Choosing a lower PIP tier saves premium dollars upfront but shifts catastrophic medical risk to your health insurer — or to you personally. If your health plan does not cover auto accident injuries, a low PIP election can leave a significant coverage gap. Consult a licensed Michigan agent before opting down.

Other Factors That Push Michigan Rates Higher

Mandatory $1 million PPI: Unlike property damage liability in most states, Michigan's PPI covers damage your vehicle causes to other people's property (buildings, fences, parked cars) within Michigan at a mandatory $1 million limit — an unusually high required coverage.
High medical cost environment: Michigan's historical unlimited PIP created incentives for inflated medical billing; cost trends persist even after the 2020 reform.
Urban density and theft: Detroit and other major metro areas have elevated accident rates and auto theft figures, pushing comprehensive and collision costs up statewide.
Credit-score restrictions: Michigan's 2019 reform banned direct use of credit scores in auto rate-setting. However, many insurers continue using proprietary "insurance scores" derived from credit-history data, which the law did not expressly prohibit — a distinction that remains contested and actively reported on.

Michigan Average Premium Ranges (2026 Estimates)

Premium figures below are labeled estimates compiled from multiple industry sources (Experian, Insure.com, MoneyGeek, The Zebra) for a 35-year-old driver with a clean record. Individual rates vary significantly based on city, driving history, vehicle, PIP tier elected, and insurer.

Coverage Type	Estimated Annual Range	Estimated Monthly
Full Coverage (liability + collision + comprehensive)	$2,700 – $3,200 / year	~$225 – $267
Minimum Coverage (state-required floors)	$700 – $1,100 / year	~$58 – $92
Detroit metro area (full coverage)	$3,500 – $5,000+ / year	~$290 – $417+

Source note: These are multi-source averages for illustrative purposes and do not constitute an insurance quote. For current rate data see the Michigan DIFS Auto Insurance page and obtain quotes from licensed insurers. Michigan rates rose approximately 12% in 2025, one of the few states where premiums increased while national averages declined.

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Frequently Asked Questions

What are Michigan's minimum car insurance requirements?

Michigan requires a no-fault policy covering three elements: Personal Injury Protection (PIP) medical, $1 million Property Protection Insurance (PPI), and Residual Bodily Injury / Property Damage liability. The bodily injury floor a driver may opt down to is $50,000 per person / $100,000 per accident (requiring a written waiver); the statutory default is $250,000 per person / $500,000 per accident. Out-of-state property damage liability minimum is $10,000. PIP medical is chosen from six tiers ranging from unlimited to $0 (Medicare enrollees only).

What PIP coverage tiers are available in Michigan?

Since the July 2020 no-fault reform, Michigan drivers choose from six PIP medical levels: Unlimited lifetime coverage; $500,000; $250,000; $250,000 with a household-member exclusion (that member must have qualified health coverage other than Medicare or Medicaid); $50,000 (Medicaid recipients only); and no PIP medical coverage (Medicare Parts A & B enrollees only). The unlimited tier is the most protective but carries the highest premium.

Why is car insurance so expensive in Michigan?

Michigan was the only U.S. state that previously required unlimited lifetime PIP medical coverage for all drivers — a mandate that produced the nation's highest premiums for decades. The 2020 reform introduced lower PIP tiers and brought some relief, but Michigan still carries a mandatory $1 million Property Protection Insurance requirement, a no-fault system with complex medical cost dynamics, and high-density urban areas with elevated theft and accident rates. These factors collectively keep Michigan among the most expensive states for auto insurance.

Can Michigan insurers use my credit score to set my rate?

Michigan's 2019 No-Fault Reform Act (Public Act 21 of 2019) prohibited insurers from using a consumer's credit score directly to establish or maintain automobile insurance rates. However, many insurers continue to use proprietary "insurance scores" derived from credit-history data, which the law did not expressly ban. The practical impact of credit-related factors on Michigan premiums remains significant and is an ongoing area of regulatory discussion.