What is the penalty for driving without insurance in Michigan?

Michigan’s auto insurance reform law allows drivers to opt out of buying unlimited personal injury protection (PIP), but they need higher liability limits. Michigan’s auto insurance reform law changed the state’s car insurance requirements for policies issued or renewed after July 2020. Michigan’s insurance reform also decreased the Michigan Catastrophic Claims Association (MCCA) fee, which drivers must pay if they purchase unlimited PIP insurance.... read full answer

Michigan Auto Insurance Reforms After July 2020

1. Drivers need $250,000 in personal injury protection per person, with lower limits or exclusions allowed for drivers with Medicare, Medicaid, or qualified health care.
2. Insurers must offer an optional supplement to PIP insurance that covers attendant care, such as home nursing.
3. Drivers need $50,000 in bodily injury liability coverage per person ($100,000 per accident), plus $10,000 in property damage liability coverage for accidents outside the state.
4. Insurers must offer $3,000 in limited property damage liability insurance, which applies if you are 50% or more at fault in an accident and the other driver sues you for vehicle damage.

Michigan has some of the most expensive car insurance premiums in the country, as well as high fraud rates. To combat this, Michigan’s auto insurance reform law implemented several new consumer protections.

Consumer Protections Created by Michigan’s Auto Insurance Reform Law

• Insurance companies can no longer consider gender, home ownership, marital status, credit score, educational level, occupation, and ZIP code when determining rates.
• Drivers cannot be penalized for a lapse in auto insurance coverage as long as they apply for insurance by January 1, 2022.
• Michigan insurers must reduce PIP premiums, and all premiums need to be approved by the Department of Insurance and Financial Services.
• A new fraud investigation unit was formed.
• Fees and penalties for insurance companies who violate laws increased.

To learn more, check out WalletHub’s guide to Michigan’s car insurance requirements.

Michigan is a no-fault state, which means drivers get coverage for most car-accident injuries from their own personal injury protection (PIP) insurance, without the need to determine who caused the accident. One way that car insurance in Michigan is unique is that policies must include property protection insurance (PPI). PPI covers damage to fences, buildings, parked cars, and other property (except for moving vehicles) within the state of Michigan only.... read full answer

Required Car Insurance in Michigan

In addition to PPI and PIP, drivers in Michigan are required to carry at least $50,000 in bodily injury liability insurance per person (up to $100,000 per accident) and $10,000 in property damage liability insurance.

Since Michigan is a no-fault state, bodily injury liability only comes into play in certain situations. For instance, the not-at-fault driver can file a bodily injury claim against the at-fault driver if they’ve exceeded their PIP limits or if they seek compensation for pain and suffering.

Optional Car Insurance Coverage in Michigan

Any coverage above and beyond what is required by Michigan law is optional, but it’s worth noting that the state minimum coverage doesn’t protect your personal vehicle. For insurance to pay for damage to your car, you’ll need collision and comprehensive insurance.

In Michigan, a policy that includes comprehensive and collision costs about $6,310 per year, compared with an average of $2,197 per year for state minimum coverage. Comprehensive and collision are usually required on leased or financed cars, but drivers who own their vehicle can decide for themselves if they should purchase this coverage.

How to Buy Car Insurance in Michigan

To buy a Michigan car insurance policy, you should compare quotes from at least three companies, then select the price and coverage details that work best for your needs. Most policies offer coverage for six months to one year at a time and can be paid in a variety of ways, including monthly installments.

Some of the cheapest car insurance companies in Michigan include Travelers, Secura, Chubb, and USAA. You can also use WalletHub’s comparison tools to find the best cheap policy.

Non-owner car insurance is a form of liability coverage that protects you if you get into an accident while driving someone else’s car. In Michigan, non-owner insurance can pay for injuries and property damage that you cause others, but it won’t pay for damage to the borrowed car or your medical expenses. It’s only used as secondary coverage to pay for damages above and beyond what is covered by the borrowed car’s insurance policy.... read full answer

What non-owner car insurance covers in Michigan

A non-owner car insurance policy usually provides minimum liability coverage. Michigan's minimum liability coverage is typically 50/100/10. Additional coverage—like collision, comprehensive, roadside assistance, towing, and rental reimbursement—is not available with non-owner car insurance policies because there isn’t a specific vehicle for the policy to insure.

Non-owner car insurance won’t cover repairs to the borrowed car after an accident – that would be collision or comprehensive coverage. But you may be able to add uninsured/underinsured motorist protection or personal injury protection to a non-owner policy. You’ll just have to ask about these coverage options when requesting quotes.

Who needs non-owner car insurance in Michigan?

You may need a non-owner policy if you don’t own a car and you:

• Want to avoid a lapse in coverage. Canceling your car insurance policy creates a lapse in your insurance history, even if you don’t have a car to cover. If you change to a non-owner policy instead of canceling, you can avoid lapses and be protected if you borrow a car.
• Are court-ordered to maintain insurance. If you’ve had major traffic violations, you may be required to maintain proof of insurance, even if you don’t own a car. This is common if you have been convicted of driving without insurance or had a DUI/DWI.
• Rent cars regularly. A non-owner policy may be cheaper than paying for liability coverage from the rental company. Not all non-owner policies extend coverage to rental cars, though, so be sure to confirm your policy covers rentals.
• Borrow cars regularly. Non-owner insurance can supplement the owner’s policy after an accident. If damages exceed the owner’s limits, your non-owner policy will kick in as secondary coverage, so you don’t have to cover the costs out of pocket.

You may NOT need a non-owner policy if you:

• Own a car. In Michigan, you’re required to carry personal injury protection and liability coverage if you own a car. You may also want to consider collision, comprehensive, and other coverage types, like MedPay, gap insurance, or roadside assistance.
• Borrow the same car regularly. If you have regular access to the same car, you should be listed on the owner’s policy. If your spouse, parents, siblings, children, family members, friends, neighbors, etc. own a car that you use often, you should be a listed driver.
• Cannot get a valid driver’s license. If you don’t have a valid driver’s license and cannot provide a valid driver’s license number, you won’t be able to finalize a policy.
• Use a borrowed car for work. A commercial non-owner policy might be better suited to this situation. If you drive a company car, the vehicle likely has enough coverage. You’ll want to confirm primary coverage before making a decision about a secondary non-owner policy.

How to get non-owner car insurance in Michigan

To purchase a non-owner car insurance policy, you’ll have to speak with an agent on the phone or in person. Not all insurance companies offer non-owner policies, and those that do have them don’t give online quotes.

To purchase a non-owner policy, you’ll need your driver’s license number and a credit or debit card. It’s also helpful to have a summary of your driving history, such as tickets, accidents, and license suspension information, so you can get the most accurate quote. In most cases, you can get proof of insurance the same day, and you’re covered as soon as your payment goes through. Non-owner coverage may not be as easy to find as traditional policies, but all of following insurance companies offer non-owner insurance in Michigan.

Michigan Insurance Companies with Non-Owner Auto Insurance Policies

• Geico: (800) 207-7847
• State Farm: (800) 782-8332
• Nationwide: (877) 669-6877

Of the top 10 largest insurance companies in the U.S., only three offer non-owner policies in all 50 states – State Farm, Geico, and Nationwide. Geico is the only company that allows you to bundle a non-owner policy with homeowner’s or renter’s insurance for a discount. Some of the largest car insurance companies do not offer non-owner policies at all, like Allstate and Liberty Mutual. Others, like Progressive, only offer coverage to existing customers.

How much does non-owner car insurance cost in Michigan?

The average cost of a non-owner auto insurance policy in Michigan is $1,073 per year. Your rate will change depending on the amount of liability coverage you want or if you want any additional coverage types, like uninsured motorist or personal injury protection.

Non-owner coverage is less expensive than policies covering a vehicle, but since there’s no car to insure, you are the main factor that determines your rate. If you have less-than-perfect credit, a spotty driving record, or are a high-risk driver, you’re still going to pay more than someone with a clean driving history and excellent credit looking for the same policy. Other factors, like your age, marital status, and neighborhood are also considered.

Final thoughts for Michigan drivers

A non-owner car insurance policy can protect you from financial hardships if you cause an accident while driving a borrowed car. Even though car insurance usually follows the car and not the driver, you could still be on the hook for expenses if damages exceed the owner’s policy limits. Whether you’re a regular renter or need affordable coverage while you’re between vehicles to avoid a gap in your insurance history, the right non-owner policy can provide the coverage you need.

Like any other car insurance, you should compare quotes from at least three insurance companies to explore your options and make sure you get the best value.