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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:

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, fences, and other people’s properly parked vehicles.

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
  • 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 may also consider reviewing the following publications:

Brief Explanation of Michigan No-Fault Insurance

Your Guide to Auto Insurance For Michigan Consumers