Customers First Insurance Group: practical insurance guidance • format updated August 2026
Insurance education • Michigan independent agency
Bodily Injury Liability and Uninsured Motorist Coverage in Michigan
Bodily injury liability protects you from claims you cause, while UM/UIM protects against drivers without enough insurance.
The short answer
Compare Michigan limits and coverage gaps.
The Short Answer
Carry enough bodily injury liability to protect your income and assets, then seriously consider matching UM and UIM limits. Michigan’s default bodily injury limit is $250,000 per person and $500,000 per accident unless another available limit is selected. The lowest permitted selection is $50,000/$100,000.
UM/UIM is optional, but it can be the only meaningful source of recovery for covered injury damages when the responsible driver cannot pay. It does not replace collision coverage for damage to your car.
Bodily Injury Liability
Uninsured Motorist
Underinsured Motorist
Vehicle Damage
What Does Bodily Injury Liability Coverage Pay For?
Bodily injury liability is third-party coverage. It does not pay your own medical bills. It addresses covered claims made by people injured in an accident for which an insured driver is legally responsible.
Depending on the claim and policy, recoverable damages may include medical expenses that become the at-fault party’s responsibility, lost earnings, pain and suffering, disability, and wrongful-death damages. The policy also provides a legal defense for covered claims, subject to its terms.
Michigan’s no-fault system limits lawsuits in many crashes, but it does not eliminate liability. Claims can arise when someone is killed or seriously injured, when certain nonresidents are involved, or when an accident occurs outside Michigan.
Michigan’s Current BI Limit Choices
Michigan’s 2025 bodily injury selection form states that policies are issued with $250,000 per person/$500,000 per accident unless the insured selects another available limit. A driver cannot select less than $50,000/$100,000.
The first number is the maximum for one injured person. The second is the maximum for all injured people in one accident.
Why the Per-Person Limit Matters
Assume you cause a crash and one injured person establishes $425,000 in covered damages. A $250,000 per-person limit can pay no more than $250,000 toward that person’s claim. The remaining $175,000 may become your personal responsibility.
The $500,000 per-accident limit does not raise the $250,000 cap for one person.
Choosing a lower limit can reduce premium, but it transfers more severe-loss risk to you. Michigan’s current selection form warns that uncovered judgments may expose assets, wages, and driving privileges. Lower limits can also prevent you from qualifying for a personal umbrella policy.
How Uninsured and Underinsured Motorist Coverage Works
UM and UIM are first-party coverages, but they are based on legal liability. You generally must show that the other driver was legally responsible and that you or another covered person has compensable damages.
- Uninsured motorist coverage (UM) applies when the at-fault driver has no applicable liability insurance, subject to the policy definition of an uninsured vehicle.
- Underinsured motorist coverage (UIM) may apply when the responsible driver has insurance but the available bodily injury limit is inadequate for the covered damages.
Coverage for hit-and-run crashes, unidentified vehicles, resident relatives, passengers, pedestrians, motorcycles, and vehicles owned but not insured on the policy depends on the contract. Notice deadlines, police-report requirements, consent-to-settle clauses, offsets, and anti-stacking provisions can materially affect a claim.
Michigan’s December 2025 auto-reform study classifies UM/UIM as optional bodily-injury coverage for insured consumers and passengers. The same report found that Michigan’s estimated uninsured-motorist rate stabilized in 2024 but remained higher than the national rate—one reason this optional protection deserves attention.
Example: Uninsured Driver
An uninsured driver causes a crash that seriously injures you. After applicable PIP benefits and other recoveries, you establish a covered bodily-injury claim. Your UM coverage may respond up to its limit and subject to the contract.
Damage to your car is a separate issue. Collision coverage is generally what pays for the repairs, less any applicable deductible.
Example: Underinsured Driver
An at-fault driver carries $50,000 of bodily injury liability, but your covered injury damages are substantially higher. If you purchased UIM, it may provide an additional recovery after the at-fault limit is addressed.
The amount depends on your damages, UIM limit, required credits or offsets, and the exact policy wording. Do not settle with the other insurer before satisfying your own policy’s notice and consent requirements.
BI, UM/UIM, PIP, Collision and Mini-Tort Are Different
Each coverage answers a different question:
- Bodily injury liability: What if you are legally responsible for injuring someone else?
- UM/UIM: What if someone else is responsible for your covered injury claim but lacks enough insurance?
- PIP: Which no-fault medical and nonmedical benefits are available after an auto accident?
- Collision: What pays to repair or replace your vehicle after a collision?
- Mini-tort: Can you recover certain uninsured vehicle damage, including an eligible collision deductible, from an at-fault driver up to Michigan’s limit?
UM/UIM is not a substitute for PIP or collision. Drivers who selected limited PIP medical coverage or opted out should understand what their health coverage will and will not pay, but they should not assume UM/UIM automatically fills every PIP gap. Read our updated Michigan no-fault reform guide and Michigan mini-tort guide for those separate decisions.
How Much Bodily Injury Liability and UM/UIM Should You Carry?
There is no universal limit, but a responsible review should consider:
- Home equity, savings, investments, and other exposed assets
- Current earnings and future earning potential
- The number of household drivers and vehicles
- Teen or inexperienced drivers
- How often you carry passengers
- Your PIP medical selection and health coverage
- Whether you need a personal umbrella
- The highest UM/UIM limits the carrier offers
Matching UM/UIM to your bodily injury liability limit is a practical starting point. If you believe another person deserves $500,000 of protection when you cause a severe injury, consider whether your family deserves comparable protection when an uninsured driver causes the same loss.
Ask whether your umbrella includes UM/UIM. Many umbrellas provide excess liability only unless an endorsement or separate option is available.
Common Coverage Mistakes to Avoid
- Buying the lowest BI limit without measuring the exposure. A serious injury can exceed $50,000 quickly.
- Assuming “full coverage” includes UM and UIM. They are optional and must appear on the declarations page.
- Believing UM pays for vehicle repairs. Standard Michigan UM/UIM is bodily-injury coverage; collision handles your car.
- Confusing uninsured and underinsured coverage. Buying UM does not necessarily mean UIM is included.
- Assuming coverage stacks across vehicles. Anti-stacking language may prevent combining limits.
- Ignoring household and owned-vehicle exclusions. A resident relative or regularly used vehicle may need to be disclosed and insured properly.
- Settling too early. A UIM claim may require notice and the carrier’s consent before accepting the at-fault insurer’s limit.
- Forgetting business, delivery, or rideshare use. Personal policies may restrict or exclude those activities.
Current Michigan Sources
- Michigan DIFS Bulletin 2025-07-INS — bodily injury limit selection form and consumer warnings, published in 2025.
- The Impact of Michigan Auto Insurance Reform — DIFS-commissioned report dated December 1, 2025, including UM/UIM definitions and uninsured-motorist analysis.
- Michigan DIFS Auto Insurance Consumer Portal — current state insurance publications and consumer resources.
Sources reviewed August 4, 2026. Policy wording and Michigan law control individual claims.
Bodily Injury Liability and Uninsured Motorist FAQs
Is uninsured motorist coverage required in Michigan?
No. UM and UIM are optional in Michigan. Bodily injury liability is mandatory, while the insured can select from available limits subject to Michigan’s statutory minimum and selection requirements.
Does uninsured motorist coverage pay to repair my car?
Standard UM/UIM bodily injury coverage does not pay for damage to your vehicle. Collision coverage is generally the coverage that repairs your car after a crash. Mini-tort may allow a limited recovery from an at-fault driver in qualifying circumstances.
What do 250/500 bodily injury limits mean?
The policy can pay up to $250,000 for one injured person and no more than $500,000 for all injured people in one covered accident. The per-accident amount does not increase the per-person cap.
Does UM/UIM replace Michigan PIP coverage?
No. PIP pays defined no-fault benefits. UM/UIM addresses a covered liability claim against an uninsured or underinsured at-fault driver. Eligibility, damages, offsets, and available limits are governed by the policy.
Should my UM/UIM limits match my bodily injury limits?
Matching limits is a sensible comparison point because it gives your household protection closer to what you provide to others. Availability, pricing, umbrella coordination, and your risk tolerance should be reviewed with a licensed agent.
Do Your Limits Protect Both Sides of the Accident?
Customers First Insurance Group can review your bodily injury, UM/UIM, PIP, collision, and umbrella limits together—so the declarations page reflects the protection you intended to buy.
Reviewed by Michael Vereecke, CLCS
President of Customers First Insurance Group and a licensed Michigan property and casualty insurance professional since 2009.
This article provides general educational information, not legal advice or a coverage determination. Policy language, eligibility, exclusions, limits, and claim facts vary. Your policy and applicable law control.
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Customers First Insurance Group. This article provides general educational information, not legal advice or a coverage determination. Coverage, eligibility, pricing, and claim outcomes vary by policy, insurer, facts, and applicable law. Read your policy and consult a licensed insurance professional about your situation.