6.5 Michigan Proof of Insurance & Financial Responsibility, UM/UIM Rules, Michigan Auto Endorsements & Other Commercial Auto Forms

Michigan Financial Responsibility & Proof of Insurance, UM/UIM Rules, Michigan Auto Endorsements & Other Commercial Auto Forms

Quick Answer: A Michigan driver must show proof of No-Fault insurance when a police officer asks; an insurer's paper or electronic certificate of insurance is prima facie evidence of coverage, failing to produce it is a civil infraction, and knowingly producing false proof is a misdemeanor (MCL 257.328). Uninsured and underinsured motorist coverage is optional in Michigan, but Michigan Administrative Code R 500.1502 classifies UM (bodily injury and property damage), UIM, and mini-tort liability coverage as "automobile insurance." The PSI outline also tests Michigan's personal auto endorsements—including the non-owner rules in DIFS Bulletin 96-02—and commercial auto forms and endorsements beyond the Business Auto form.

Section 6.1 covered No-Fault PIP and residual liability limits, and Sections 6.3–6.4 covered the ISO personal and business auto forms. This section fills in the Michigan rules that sit around those policies: how insurance is proved on the road, how UM/UIM fits into a No-Fault state, and which endorsements change the standard forms.

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1. Proof of Insurance & the Financial Responsibility Law

Producing Evidence of Insurance (MCL 257.328)

• Duty to produce: The owner or operator of a motor vehicle on a Michigan highway must produce, on a police officer's request, evidence that the vehicle is insured under the No-Fault chapter (MCL 500.3101–.3179). Failing to produce it—or failing to have the required insurance—is a civil infraction.
• Certificate of insurance: A certificate issued by the insurer, in paper or electronic form, certifying that security meeting MCL 500.3101 and 500.3102 is in force is prima facie evidence that the vehicle is insured until the expiration date on the certificate. The certificate must also name any individual whose operation of the vehicle would void the liability coverage (an excluded driver). An officer viewing an electronic certificate may look only at the certificate, not at anything else on the device.
• Proof brought to court: If, before the appearance date, the driver proves to the court that the vehicle was insured when the citation was issued, the court assesses no fine or costs, does not send an abstract to the Secretary of State, and may charge a fee of no more than $25.
• When responsible: The court may require the driver to surrender the license; the Secretary of State then suspends it for 30 days or until proof of insurance is filed, whichever is later (with a $25 service fee), and will not renew, transfer, or replace that vehicle's registration plate until the owner meets the insurance requirement (unless the vehicle is sold to someone outside the owner's immediate family).
• False evidence: Knowingly producing false evidence of insurance is a misdemeanor punishable by up to 1 year in jail, a fine of up to $1,000, or both. No points are added to the driving record for violations of this section, and the section does not apply to vehicles registered in another state or country.

Proof of Financial Responsibility (MCL 257.518 and 257.520)

When the Secretary of State requires a person to file proof of financial responsibility under the Vehicle Code, the usual proof is an authorized insurer's certificate that a motor vehicle liability policy is in effect, giving its effective date and describing the covered vehicles (MCL 257.518). Under MCL 257.520, that motor vehicle liability policy must insure the named insured and anyone driving with permission, anywhere in the United States or Canada, for at least $20,000 per person / $40,000 per accident for bodily injury and $10,000 for property damage. A No-Fault policy issued or renewed after July 1, 2020 carries higher residual liability limits—$250,000/$500,000 unless the named insured elects lower limits in writing, never below $50,000/$100,000 (MCL 500.3009; see Section 6.1).

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2. Uninsured & Underinsured Motorist Coverage in a No-Fault State

• Optional, contractual coverage: Michigan's No-Fault law does not require uninsured (UM) or underinsured (UIM) motorist coverage. When an insurer sells it, who is insured, hit-and-run physical-contact requirements, notice and consent-to-settle conditions, and set-offs come from the policy language, and Michigan courts generally enforce those terms as written.
• Classified as automobile insurance (R 500.1502): Under Mich. Admin. Code R 500.1502, three coverages count as "automobile insurance" under the Essential Insurance Act (MCL 500.2102(2)(d)): uninsured motorist coverage for bodily injury and property damage claims, underinsured motorist coverage, and coverage for mini-tort liability under MCL 500.3135(3)(e). That classification brings these coverages within the Act's rules on availability, rating, and termination.
• What UM/UIM bodily injury really pays: PIP already pays the injured person's economic loss regardless of fault, so UM/UIM chiefly pays the damages the insured could have recovered in tort from an uninsured or underinsured at-fault driver—noneconomic damages and economic loss above PIP. The insured therefore still has to meet the tort threshold for noneconomic loss (death, serious impairment of body function, or permanent serious disfigurement) and the more-than-50% fault bar.
• Rejection and rental vehicles: Because no statute mandates the coverage, there is no state-prescribed rejection form; the applicant buys or declines the optional coverage, and the adjuster confirms from the declarations what was purchased. A personal auto UM endorsement typically protects the named insured and resident family members while occupying any vehicle—including a rental car—or as pedestrians, and protects others only while occupying a covered auto, subject to the policy's other-insurance clause.

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3. Michigan Personal Auto Endorsements on the PSI Outline

DIFS Bulletin 96-02 (named non-owner and extended non-owned endorsements): A named non-owner endorsement gives auto liability coverage to someone who owns no vehicle but has other people's vehicles available to drive, and an extended non-owned endorsement covers a driver's use of non-owned vehicles for business purposes. When attached to a Michigan No-Fault policy, these endorsements provide only residual liability coverage, and only for the person named and his or her spouse. Because a named person who is not an "owner" is not buying "automobile insurance" under Chapter 21, the mandatory PIP and PPI coverages tied to vehicle ownership are not part of the endorsement. If that driver is injured, PIP comes from the household or other priority sources in MCL 500.3114–.3115, not from the non-owner endorsement.

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4. Other Commercial Auto Coverage Forms

• Truckers Coverage Form (CA 00 12): Written for truckers who haul goods for others for a fee under a government regulatory authority. It was developed before the trucking industry was deregulated and is still used mainly by common carriers. It combines liability and physical damage coverage and includes trailer interchange coverage for non-owned trailers held under a written trailer interchange agreement. The newer Motor Carrier Coverage Form (CA 00 20) (Section 6.4) is built around contracts rather than regulatory authority and fits both for-hire and private carriers.
• Business Auto Physical Damage Coverage Form (CA 00 10): Provided physical damage coverage only—collision plus comprehensive or specified causes of loss—for autos whose liability was insured elsewhere. ISO withdrew it in the 2013 commercial auto revision, moving that coverage to the Business Auto (CA 00 01) or Motor Carrier (CA 00 20) forms; adjusters may still see it on older files.
• Michigan reminder: Whatever commercial form is used, owned autos subject to Michigan No-Fault must carry PIP and PPI, which is why Michigan business auto policies show Symbol 5 (Owned Autos Subject to No-Fault).

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5. Selected Commercial Auto Endorsements

• Lessor — Additional Insured and Loss Payee (CA 20 01): For an auto leased under an agreement that requires the lessee to provide primary insurance for the lessor. The scheduled leased auto is treated as a covered owned auto; the lessor becomes an insured for liability, but only for the acts or omissions of the named insured, its employees or agents, or permissive drivers (not the lessor's own acts); and the lessor is a loss payee for physical damage, paid as interests appear. The lessor must receive notice of cancellation, and the lessor is not liable for premiums.
• Mobile Equipment (CA 20 15): Makes scheduled mobile equipment—such as a backhoe that must carry auto insurance when it travels on public roads—a covered auto for auto liability and physical damage. Liability under the auto policy applies only while the equipment is used as a vehicle; injury or damage from operating the attached machinery (digging, lifting, spraying) stays with the CGL.
• Michigan Personal Injury Protection and Michigan Property Protection Coverage: Add Michigan's statutory No-Fault coverages to a commercial auto policy for autos subject to No-Fault. Priority rules still decide who pays: for example, an employee injured while occupying an employer-furnished vehicle claims PIP from the insurer of that vehicle (MCL 500.3114(3)).
• Drive Other Car (CA 99 10) and Individual Named Insured (CA 99 17): Covered in Section 6.4; both fill the personal-use gap for people who drive company vehicles or insure their personal autos under a business auto policy.