The Wolverine State requires residents to purchase quite a bit of coverage to satisfy the legal requirements to operate a vehicle. Unfortunately, this translates into higher premiums for motorists and residents of Detroit are paying some of the highest premiums in the nation and finding it almost impossible to keep automobiles insured. Similar to states such as New York, which residents also pay a hefty amount for insurance, MI requires multiple levels of coverage in hopes to best protect its residents.
The Michigan auto insurance requirements mandate that as a minimum all operators must carry a policy that includes Personal Injury Protection (PIP), Property Protection (PPI), Residual Bodily Injury and Property Damage Liability (BI/PD). A policy such as this will be needed to register a vehicle and obtain license plates and with such extensive coverage needed, one can see why the cost to become insured can be quite expensive. States such as California only require policies containing bodily injury and property damage liability. The difference is that MI is a “No-Fault” state with required coverage that provides compensation to policyholders regardless of who is at fault for causing the traffic accident and CA policies cover the other party if an insured causes a collision. No-fault states use this system in hopes to keep lawsuits from being filed since payment is readily available.
The personal injury protection portion of a policy covers the insured and family members who reside in the household of the insured with an unlimited amount of medical and rehabilitation benefits, limited wage loss benefits and $20 per day for replacement services such as housekeeping, landscaping, etc. for up to three years if if the insured is no longer able to perform these duties. The benefits for wage loss are 85% during the period that the injured party cannot work, but cannot exceed $4,878 per month; this amount is reviewed and revised on an annual basis. A policyholder who is killed in an accident will have these benefits passed on to family members who reside in the same household for the three year period.
The Michigan Department of Energy, Labor & Economic Growth also requires that the property protection (PPI) portion of the policy is set at $1 million and pay for property damage that the insured may cause as a result of a traffic accident such as a person’s properly parked vehicle, home, fence, building, etc. However, it will not pay for vehicle damage resulting from a traffic accident. Bodily injury and property damage liability are required in the event that an insured motorist does cause an accident and is liable to pay for damages caused in another state. With such extensive coverage needed in MI, it can be quite easy to see why auto insurance can be quite expensive for residents.
Source: http://www.onlineautoinsurance.com/michigan/
