• Michigan's no-fault insurance law requires all registered vehicles to have valid auto insurance.yellow car, a honda japanese sport car model image by alma_sacra from Fotolia.com
  
  Prior to 1973, compensation for injuries from a car accident in Michigan was usually determined under a tort law claim filed in a civil court. Currently, injuries and damages from a car accident in Michigan are under the jurisdiction of Michigan's No-Fault Insurance Act, enacted in 1973. In general, this act requires car owners to purchase basic insurance coverage and bars civil liability in a majority of automobile injury cases.
  
  

Basic Coverage

• Michigan requires every registered car to have minimum insurance coverage. In return, the no-fault law allows drivers to recover certain amounts regardless of who caused the accident (hence the term "no-fault" insurance). Basic coverage is comprised of three things: personal injury protection, property protection and residual liability insurance. Personal injury protection covers medical costs and up to 85 percent of a driver's income if the driver cannot work due to the accident. Property protection pays up to $1 million for damage the driver's vehicle does to other property; it does not cover damage to the driver's car. Residual liability insurance protects the driver in the event that he causes the death or serious bodily impairment to another person. In that event, the residual liability covers up to $20,000 for one person hurt or killed in an accident (or $40,000 if several people are hurt or killed).
  
  

Additional Coverage

• A car owner can purchase other types of optional coverage in addition to the basic coverage. A common example is "collision and comprehensive insurance." This type of insurance will pay to repair damage to the owner's car. The extent and amount depend on the type of comprehensive coverage offered by the insurance company.
  
  

Penalties for Lack of Coverage

• Michigan requires all registered cars to be insured. If a driver operates a car in Michigan without valid insurance, that driver may be convicted of a misdemeanor. The penalty is a fee of up to $500 and/or up to one year in jail. Further, if a driver is involved in an accident and does not have basic coverage, that person may be liable for medical bills and property damage and may be sued for civil damages.