Answers · Michigan crash law
The Insurance Company Says the Policy Is Only $50,000. Michigan Law May Say Otherwise.
If you were seriously hurt in a collision and the at-fault driver’s insurance company tells you the policy is “only $50,000,” do not take that number at face value.
Since July 2, 2020, Michigan law sets the floor for bodily injury liability coverage at $250,000 per person and $500,000 per collision. A lower limit is the exception, not the rule, and the law makes the insurance company earn that exception.
What are Michigan’s minimum bodily injury limits after the 2020 reform?
Since July 2, 2020, every Michigan auto policy carries at least $250,000 per person and $500,000 per collision in bodily injury liability coverage. A driver can go lower, down to $50,000/$100,000. That takes a signed form issued by the state. Without it, the higher limits apply automatically.
Michigan’s no-fault reform rewrote MCL 500.3009. For decades, drivers could carry as little as $20,000 in bodily injury coverage. The reform raised the default dramatically. Under MCL 500.3009(1), every auto policy issued in Michigan after July 1, 2020 must provide at least $250,000 per person and $500,000 per collision in bodily injury liability coverage.
A driver can still choose lower limits, down to $50,000/$100,000. But the word that matters is choose. Under MCL 500.3009(5), the insured has to complete a specific form issued by the state insurance director. The statute spells out what that form must contain: a conspicuous warning about the risks of lower limits, acknowledgment boxes, and a place for the insured to sign. MCL 500.3009(7).
Then comes the provision that decides real cases. Under MCL 500.3009(8), if a policy is issued or renewed and the person named in the policy “has not made an effective choice” of lower limits, the $250,000/$500,000 limits apply to the policy. Automatically. By operation of law.
Have Michigan courts actually enforced the $250,000 default?
Yes. The Michigan Court of Appeals has held insurers to the full $250,000 in published 2024 decisions where no valid selection form existed. The pattern is consistent. The insurer points to a low number on a declarations page. The court asks to see the signed form.
The Michigan Court of Appeals has now said this in published opinions. In Progressive Marathon Insurance Co v Espinoza-Solis (2024), the court held that $250,000/$500,000 is the statutorily required minimum for policies issued after July 1, 2020 “unless the proper steps are followed” to select lower coverage, and it held an insurer to the full $250,000 where there was no evidence the insured had opted for less. In State Farm Mutual Automobile Insurance Co v Estate of Fortin (2024), the court held that a policy may not provide reduced bodily injury coverage in the absence of an effective choice, and that the choice has to be made before or when the policy is issued.
The pattern in these cases is simple. The insurer points to a low number on a declarations page. The court asks for the signed selection form. If the form does not exist, was never signed, or does not cover the relevant policy, the default limits control.
Why does the difference between $50,000 and $250,000 matter?
Often the difference between a settlement that covers a fraction of your losses and one that approaches full value. Adjusters quote the declarations page. The declarations page is not the law. The signed election form is, and insurers do not always have one.
Questions worth asking in any serious injury case:
- Did the insurer produce a selection form signed by the named insured, or just a declarations page showing a low limit?
- Does the signed form meet every requirement of MCL 500.3009(7), including the signature?
- Does a signed form actually exist for the policy in effect on the date of the collision?
If the answer to any of these is no, the policy may be worth five times what the adjuster is telling you.
Should I accept the policy limit an adjuster quoted me?
Not before someone examines the coverage itself. Ask whether a signed selection form exists for the policy in effect on the date of the collision. Ask whether it meets every requirement of MCL 500.3009(7). If it does not, the policy may be worth five times the number you were given.
Coverage questions under MCL 500.3009 are technical, the case law is still developing, and insurers do not volunteer that their own paperwork is missing. If you or a family member suffered a serious injury in a Michigan collision and the insurance company is quoting a $50,000 policy, have an attorney examine the coverage before you accept anything.
I handle serious injury and insurance coverage litigation in Michigan courts, and I routinely litigate these exact disputes and obtain court orders reforming policies to the full $250,000/$500,000 statutory limits when the insurer cannot produce a valid, signed selection form. If you have questions about a coverage limit you have been quoted, reach out.
Frequently asked questions
The at-fault driver’s insurer says the policy is only $50,000. Is that final?
Not necessarily. Since July 2, 2020, Michigan’s default bodily injury limits are $250,000 per person and $500,000 per collision under MCL 500.3009(1). A lower limit only applies if the insured made an effective choice on a signed form meeting the statute’s requirements. If no valid signed selection form exists, the default limits control.
What are Michigan’s default bodily injury liability limits after the no-fault reform?
$250,000 per person and $500,000 per collision for policies issued or renewed after July 1, 2020. Drivers may choose limits as low as $50,000/$100,000, but only by completing the state-issued selection form with the warnings and signature MCL 500.3009(7) requires.
What happens if the insurer cannot produce a signed limits selection form?
Under MCL 500.3009(8), if the named insured has not made an effective choice of lower limits, the $250,000/$500,000 limits apply by operation of law. Michigan’s Court of Appeals has held insurers to the full default limits in published decisions where no valid selection existed.
Talk to someone about your case
Free consultation. No fee unless you recover. If an adjuster has quoted you a policy limit, it costs nothing to have the coverage examined properly.
This article is legal information, not legal advice, and does not create an attorney-client relationship. Every case depends on its facts. Attorney advertising. Past results do not guarantee a similar outcome. Gary Safir is a trial lawyer at Michigan Auto Law, licensed in Michigan and Ohio.