The three required parts, in plain English
These summaries follow the current DIFS auto insurance pages. Your policy’s wording controls, and an agent can explain how each part applies to you.
- Personal injury protection (PIP)
- A mandatory no-fault coverage that pays allowable expenses for your medical care, recovery and rehabilitation if you’re injured in an auto accident. The medical portion is what you choose a level for. PIP also includes wage loss, replacement services and funeral and burial expenses, which DIFS says remain part of the policy even if you exclude or opt out of PIP medical coverage.
- Property protection insurance (PPI)
- A mandatory coverage that pays up to $1 million for damage your car does in Michigan to other people’s property, such as buildings and fences. It also pays for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars.
- Residual liability (BI/PD)
- A mandatory coverage that applies if you’re held legally responsible for another person’s death, bodily injury or damaged property in an auto accident. It includes compensation for death or serious injury and pain and suffering, and it applies to accidents outside Michigan or with an out-of-state driver. You choose the limit when you buy or renew.
Sources: DIFS, DIFS auto insurance FAQ; DIFS, Choosing PIP Medical Coverage; DIFS, Choosing Bodily Injury Coverage; and the DIFS Selection of PIP Medical Coverage form (Ed. 2025). State law and DIFS guidance can change, so confirm current details with DIFS or your agent.
The choices inside each part
PIP medical coverage level
DIFS lists six PIP medical levels. Options 1, 2 and 3 are available to all drivers; options 4, 5 and 6 are available only to people who have the required health coverage or enrollment:
- Option 1: unlimited coverage
- Option 2: $500,000 per person per accident
- Option 3: $250,000 per person per accident
- Option 4: $250,000 per person per accident with exclusions, when qualified health coverage conditions are met
- Option 5: $50,000 per person per accident, for people enrolled in Medicaid, subject to conditions
- Option 6: no PIP medical coverage (opt-out), for people with Medicare Parts A and B, subject to conditions
If you don’t make an effective PIP medical selection, what applies can depend on whether the policy is new or a renewal and on your prior selection. DIFS says that if you don’t make a selection, fail to provide required documentation, or choose an option you don’t qualify for, the policy is issued with the default PIP medical coverage level and you’re charged the associated premium. DIFS’s current selection form describes that default as unlimited PIP medical coverage, and adds that a renewing policy that already carries an unlimited, $500,000 or $250,000 (no excluded persons) selection is issued with the same PIP medical coverage as the expiring policy. Options 4, 5 and 6 require current documentation at issuance and at each renewal. Your agent can explain what applies to your policy.
Liability limits (BI/PD)
DIFS lists the default limits as up to $250,000 for a person who is hurt or killed in an accident, up to $500,000 for each accident if several people are hurt or killed, and up to $10,000 for property damage in another state. If you don’t make a selection, you’ll have the default limits. The lowest limits DIFS says you may purchase are $50,000 per person, $100,000 per accident and $10,000 for property damage in another state. DIFS also notes that if costs exceed your limit you may be required to pay the difference, so it encourages people to consider their limits carefully and to speak with an agent.
These are choices about how much protection to carry and what risks to accept. We can explain the tradeoffs, but we can’t pick your limits from a web page.
No-fault doesn’t fix your own car
Michigan’s required coverages are about injuries and about damage you do to other people’s property. They are not what pays to repair your own vehicle after most accidents. Repairs to your car are what optional collision and comprehensive coverages are for, and DIFS’s older “Quick Facts” publication (July 2020) notes one exception: when your car is properly parked and hit by another car, the other driver’s no-fault coverage pays for that damage. Ask an agent how the optional coverages work and whether they fit your situation.
Moments to revisit your auto policy
- A new driver joins the household
- You bought or sold a vehicle
- You moved, or your vehicle is now kept somewhere else
- Your health coverage or Medicare status changed, which can affect PIP options
- Your renewal is coming up and something changed
What helps start a quote
- Who drives, and which vehicles you own
- Where each vehicle is kept
- Your current coverage and renewal date
- Information about your health coverage, since it can matter for PIP choices
To finish a quote, an agent may ask for driver details later. Please don’t send license numbers or payment details through this website.
Common questions
Is auto insurance required in Michigan?
DIFS says that to drive legally in Michigan, state law requires the purchase of no-fault auto insurance, and that the three basic coverages (PIP, PPI and BI/PD) must be purchased and carried on every vehicle. See the DIFS auto insurance FAQ for the current requirements and penalties.
What does PIP pay for?
According to DIFS, PIP pays allowable expenses for your medical care, recovery and rehabilitation if you’re injured in an auto accident, up to the medical coverage level you selected, and also includes wage loss, replacement services and funeral and burial expenses. The exact benefits and limits depend on your policy and the Insurance Code, so check DIFS’s current pages and your policy.
Does no-fault insurance pay to fix my car?
Generally not. Repairs to your own car are what optional collision and comprehensive coverages are for, with the narrow exception DIFS’s 2020 “Quick Facts” describes for a properly parked vehicle hit by another car.
Can I choose different liability limits?
Yes, within the range DIFS publishes. The default limits are $250,000 per person, $500,000 per accident and $10,000 for property damage in another state, and the lowest you may purchase are $50,000, $100,000 and $10,000. An agent can walk through the choices with you.
Will this page tell me what limits to buy?
No. This page is educational. The right choices depend on your household, assets and health coverage, and an agent can talk them through with you.