• Motorists are required by state law to have auto insurance in Michigan.Traffic light image by Tasha from Fotolia.com
  
  As in most states, Michigan law requires motorists to purchase a minimum amount of auto insurance before they take to the roads. Motorists who ignore this law could face hefty fines and even jail time. It's important, then, for drivers in Michigan to understand the auto insurance laws in their state.
  
  

Penalties

• Drivers in Michigan are required by state law to have no-fault auto insurance. Those drivers who don't, face a possible fine of $200 to $500 and up to a year in jail. Drivers might also have their license suspended until they can prove that they have the basic no-fault auto insurance required by state law.
  
  

Requirements

• Michigan requires that motorists have no-fault insurance with three basic protections: Personal injury protection will pay any medical costs you incur in an accident, property protection will pay up to $1 million for any damages your car causes to other people's property, and residual bodily injury and property damage liability insurance pay your legal defense costs and any damages you are found liable for following an auto accident up to policy limits.
  
  

Minimum Amounts

• For residual bodily injury and property damage liability insurance, motorists must pay for certain amounts of coverage under Michigan law. Motorists must take out a policy that provides at least $20,000 in coverage for medical costs of any person that is killed or seriously injured in an auto accident. They must take out at least $40,000 to cover the cost of each accident if several people are hurt or killed. Finally, they must take out at least $10,000 to cover property damage they might cause while driving in another state.
  
  This type of basic coverage is known as 20/40/10 coverage.