Michigan insurance laws for cars operate using the no-fault system. This increasingly common form of auto insurance is very different to states that follow the Tort system. Vehicle owners in Michigan are subject to restrictions regarding legal action in the event of a road traffic accident. The insurance company of each individual policyholder will pay for the cost of damages caused although non-economic losses may fall outside these restrictions.
Under the Automobile Insurance Act MCL 500.3101, injury or death can result in two claims that can be made by the victim or their immediate family. The first is for personal protection benefits that cover damage to the car and property. Cyclists and pedestrians can also use this method to claim against a driver who injures them as a result of an accident.
Michigan drivers must have a minimum level of coverage that is referred to as 20/40/10 cover. This equates to $20,000 of bodily injury liability for per person, $40,000 of bodily injury liability per accident and $10,000 of property damage cover. Drivers must also have $1,000,000 of property protection insurance as well as personal injury protection for medical treatment and loss of work.
Michigan, like many other states, also offers a range of optional coverage. This includes insurance against collision damage that will pay for repairs to a car in the event of an accident. Optional insurance add-ons also include coverage against uninsured or underinsured drivers to protect you against motorists with inadequate cover. Also, it provides cover against uninsured drivers who disobey law and drive without any insurance at all.
There will usually be a deductible that you will have to pay in the event of a claim. This is usually calculated by the price of the premium and the selected value of deductible is usually between $250 and $500. The higher the value of the chosen deductible, the lower the cost of the premium will be.