It is against the law to drive without liability car insurance in Michigan. The required insurance coverage is called “Michigan No Fault Insurance”. Liability insurance protects other people if they are hurt or if their property is damaged. Michigan mandates the following minimum amounts of liability insurance.

• $20,000 bodily injury liability for one person,
• $40,000 bodily injury liability for all injuries in one accident,
• $10,000 property damage liability

Proof of Insurance

In Michigan, you can be required to provide proof of insurance when you first register or renew your cars registration. You can also be required to show proof of insurance if you are involved in an accident or stopped by a law enforcement officer. If asked to provide proof of insurance, you should provide your insurance identification card. Your auto insurance provider is required to give you an insurance identification card when you purchase or renew your insurance policy. The card must provide the name of the insurance company, the policy number, the policy’s effective date and expiration date and a description of your car. If you are stopped by a law enforcement officer and cannot provide proof of insurance, you will be issued a traffic ticket. If you are unable to provide proof of insurance, within a prescribed period of time, you can be fined between $200 to $500 for two consecutive years. You could also have your driver’s license suspended and possibly even receive jail time.

The Reason for Michigan’s No Fault Insurance:

• No fault insurance protects those who are injured in an accident from losses resulting from an accident.
• No fault insurance eliminates lawsuits so that claims can be paid quicker and cheaper.
• No fault insurance protects insured drivers from being sued.

Full Coverage Auto Insurance in Michigan

Even though it is not required most drivers elect to get full coverage auto insurance. Liability insurance only protects the other person. People want to get full coverage insurance to protect themselves and their property.

Collision Insurance

Collision insurance covers your car and its contents in the event of an accident. The insurance company will pay for all repair and replacement cost in excess of your deductible. The insurance company will not settle for more than the cash value of your vehicle so be careful about how much coverage you buy. Collision insurance is not required by the state, but may be required by the bank or lien holder, if you have a loan on your car or lease your car.

Comprehensive Insurance

Comprehensive Insurance covers the damage to your car for events like theft, fire, vandalism storms or other acts of god. You should limit the amount of your comprehensive insurance coverage to your vehicles cash value. Comprehensive insurance is not required by the state, but may be required by the bank or lien holder, if you have a loan on your car or lease your car.

SR 22 Coverage

If the state of Michigan, makes the determination that you are a high risk driver, you will have to meet the state’s SR 22 requirements in order to drive. SR 22 rules obligates a drivers insurance company to send the state a form, which verifies that a driver meets the states  minimum insurance requirements. The purpose of the SR 22 insurance rules is to make sure that high risk drivers are financially responsible.

The main reason that people need SR 22 car insurance in Michigan is because they have been convicted of driving under the influence (DUI). The state of Michigan considers driving under the influence to be a serious offense. You are considered to be driving under the influence if your blood alcohol content (BAC) is 0.08% or higher. The penalties for driving under the influence are as follows.

1st Drunk Driving Conviction

• Jail – Up to 93 Days
• License Suspension – Up to 6 Months
• License Suspension – Eligible for Restricted License after 30 Days • License Points – 6
• Fine – From $100 to $500
• Fine – $1,000 Driver Responsibility Fee for 2 Years

Other Possibilities

• Community Service – Up to 360 Hours
• Ignition Interlock
• Vehicle Immobilization

There are also other cost that come with a DUI conviction such as legal expenses and the high cost of SR 22 insurance coverage. It is important to remember never drink and drive.

Average Cost of Auto Insurance

According to carinsurance.com, in Michigan, the average auto insurance premium for auto insurance in Michigan in 2010 was $2029.00. This is somewhat higher than the national average of $1577.00.