What auto insurance coverage do I have to purchase?

There are three basic parts to a no-fault policy that must be purchased and carried on every vehicle. They are:

Personal Injury Protection (PIP) - PIP pays all reasonable and necessary medical expenses for your lifetime if you are hurt in an auto accident, and wage loss and replacement services for up to three years after the date of the accident.

Property Protection (PPI) - PPI pays up to $1 million for damage your vehicle does in Michigan to other people's property, such as buildings and fences.

Residual Bodily Injury and Property Damage Liability (BI/PD) - BI/PD pays, up to the limits of the policy, your defense costs and any damages you are found liable for as the result of an auto accident in which someone was killed or seriously injured. The minimum limits of coverage that everyone must purchase are $20,000 per person who is hurt or killed in an accident, $40,000 for each accident if several people are hurt or killed, and up to $10,000 for damage your vehicle does to property damage in another state. These minimum limits are often referred to as 20/40/10. You can purchase higher limits of BI/PD coverage, which will be explained in the next section.

You can learn more about each of these mandatory no-fault coverages in our publication: Brief Explanation of Michigan No-Fault Insurance. You can also obtain additional information by reviewing: A Consumers Guide to No-Fault Automobile Insurance in Michigan and Your Guide to Auto Insurance For Michigan Consumers.