Do I Have to Buy Car Insurance in Michigan?

We cannot tell you how many people contact our firm after a car crash wondering what their rights are if they were driving without insurance at the time of the collision. These are often difficult intakes to field. More often than not, an uninsured driver’s rights are very, very limited in Michigan. This is true even if the other driver was totally at-fault for the collision. And with so much going on in our state’s auto insurance system currently, many people still wonder “do I have to buy car insurance in Michigan?” and “what happens if I’m in a wreck without coverage?” Lansing auto accident attorney, Bryan Waldman, covered this topic this week on WLNS 6 “Legal Edge.”

Prevalence of Driving Without Insurance in Michigan

First, it’s important to understand how many uninsured vehicles are on Michigan’s roadways. Bryan discussed the prevalence of uninsured driving in Michigan, using Indiana as an example. Indiana is not a no-fault state. Indiana law does not require motorists to buy medical coverage as part of their auto insurance. Indiana’s uninsured driver rate is 17% of drivers, compared to Michigan’s 20% of uninsured driver rate. Whereas no-fault coverage is mandatory in Michigan (which until recently provided for lifetime medical coverage without a monetary cap), Indiana consumers do not have to purchase any medical coverage whatsoever. In fact, those who do purchase medical expense benefits in Indiana typically buy only $10,000 worth of medical coverage, which is obviously not going to go far when someone is injured in a crash. Despite the lack of mandatory medical coverage, almost one-fifth of Indiana drivers remain uninsured. Accordingly, one can conclude that trying to make auto insurance cheaper by eliminating the medical coverage required does not necessarily cause a meaningful reduction in the number of uninsured drivers.

What Happens if You’re In a Car Accident and Don’t Have Insurance

There are multiple consequences for driving uninsured, both civilly and criminally.

Barred from Pursuing Civil Claims for Damages

For those who do insure their vehicle in Michigan, they may be able to pursue two separate civil claims:

  1. claim against their own auto insurance provider for no-fault PIP benefits
  2. a liability claim against the driver who was responsible for the collision which are most commonly for quality of life damages, such as pain and suffering, but can also include wage loss that is not covered in the form of no-fault PIP benefits.

Under the Michigan No-Fault Act, you can pursue medical expenses, wage loss benefits, and replacement services if you’re injured in a car accident. Unfortunately, if you do not insure your vehicle, you are not entitled to these benefits. Most people understand this. However, we receive inquiry after inquiry about legal rights when the other driver was completely at-fault and the uninsured driver did nothing to cause the accident. Even under these circumstances, if you choose not to insure your own motor vehicle, you will almost never be able to sue the other driver who caused the accident.

Those who choose to not insure their car are simply barred from pursuing a liability claim for quality of life damages. A very small number of uninsured people are able to pursue a claim for what is known as “excess economic loss damages” or wage loss that occurs beyond what would have been available in the form of no-fault PIP benefits (currently, wage loss above $5718 per month for the first three years and any lost earnings suffered more than three years after the collision).

Criminal Liability for Uninsured Drivers in Accidents

In addition to not being able to pursue any type of civil claim, you may also be held criminally liable. You can receive a misdemeanor charge if you are caught driving without insurance on a vehicle you own. You can also receive a fine of $200-500 and up to one year in prison for not insuring your vehicle and continuing to drive it on Michigan roads.

Auto Insurance is Mandatory in Michigan

If you’re reading this and still wondering “do I have to buy car insurance in Michigan?” the answer is a resounding YES! And by choosing not to do so opens you up to civil and criminal liability that isn’t worth the hassle, not to mention leaves you in an incredible bind should you be in a motor vehicle crash while driving uninsured.

All Drivers – Protect Yourselves from Uninsured Drivers

At a rate of 20% of uninsured vehicles on Michigan roadways, it’s incredibly important to protect yourself as best as possible in the event of a crash with an uninsured car. And, in our experience, those who do not insure their vehicles are also, more often than not, the most irresponsible drivers. In order to protect yourself and your family, Bryan suggests purchasing as much uninsured motor vehicle coverage as you can afford. This form of optional auto insurance coverage protects only you and your family from uninsured drivers. We find the add-on of uninsured motor vehicle coverage, and underinsured motor vehicle coverage, are two of the most cost-effective and important elective insurance coverages to purchase.

Click here for all of our insurance coverage recommendations under Michigan’s new no-fault law.

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