Residents of the Wolverine State are well aware that if they own and operate an automobile the cost of ownership can be exorbitant. Aside from the normal ownership costs of vehicles including oil changes, tires, tune ups, gasoline, etc., Michigan’s motorists are also required by law to maintain the mandated auto insurance coverage set by the state. Unfortunately, the requirements are quite extensive and generally lead to high premiums for drivers. In fact, the average amount paid by consumers for automobile policies are among the highest in the nation and in a city such as Detroit, a motorist may be looking at an annual premium of over $4,000.

One of the major reasons that the cost of Michigan car insurance coverage can become very expensive is due to the fact that the state enforces one of, if not the most comprehensive No-Fault insurance systems in the United States to cover the expenses arising from traffic accidents. The majority of states follow the tort system and require motorists to purchase liability coverage to pay for bodily injuries and property damage that a policyholder may cause to a third party. MI mandates that this type of protection be maintained by motorists as well as purchasing policies that will cover the insured for their injuries in the event of an accident regardless of who is to be found at fault. This type of system is believed to be effective in ensuring that a person receives the compensation needed should they be injured and suffer losses in an auto collision.

Breakdown of Michigan auto insurance Requirements

As mentioned, policies must contain extensive coverage consisting of various types of protection. Motorists must carry Residual Liability to cover the bodily injury and/or property damage that they may cause to another person. The minimum limits required are $20,000 for bodily injuries to one person, $40,000 for bodily injuries to two or more people and $10,000 for property damage caused in another state. In addition, drivers must also obtain Property Protection with a limit of $1 million to pay for damages sustained to another person’s property. This will pay for damage caused to such items as poles, fences, buildings and legally parked vehicles.

The most extensive portion of a MI automobile policy is probably Personally Injury Protection (PIP). This covers injuries sustained by the insured and will pay all medical expenses incurred that result from a traffic accident regardless of who is at fault. Additionally, the policyholder will receive 85% of the income that they would have earned if they are unable to work following the incident for up to three years. The maximum amount that can be received by policyholders is $4,929 monthly and is adjusted each year; the last adjustment took place October 1, 2010. If the insured is killed in the accident then the benefits will be transferred to the household family members. Although the cost of coverage in the Wolverine state can be a bit costly it does come with its benefits. Residents may want to refer to the publication titled, Brief Explanation of Michigan No-Fault Insurance to get additional information regarding policies.