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What is Property Protection Insurance (PPI) in Michigan?


Michigan is considered a no-fault state when it comes to auto insurance. Every driver in this state must carry no-fault insurance in order to remain legal on the roadway. Under this type of insurance system, individuals will turn to their own insurance carriers to pay for their medical bills and lost wages. Your own insurance carrier pays these expenses regardless of who caused the accident. Here, we want to discuss property protection insurance (PPI), which is one of the mandatory coverages that all drivers must carry in Michigan.

Michigan is a No-Fault Car Insurance State

There are not very many states across the country that operate under a no-fault system when it comes to auto insurance. However, there are some benefits to this type of system. Typically, we will find that drivers are able to recover compensation for their medical bills and property damage a bit faster under a no-fault system because they only have to turn to their own insurance carrier without determining the fault of the other party.

In Michigan, all drivers are required to carry the following types and minimum of insurance:

  • Bodily injury liability coverage: $20,000 per person and $40,000 per accident
  • Property damage liability coverage: $10,000
  • Property protection: $1 million
  • Personal injury protection: Unlimited with a $0, $300, or $500 deductible

Understanding Property Protection Insurance

Property protection insurance (PPI) is one of the mandatory coverages that all drivers have to carry in Michigan. This is designed to cover damage to tangible property that occurs during a vehicle accident.

What does it mean for a property to be “tangible?”

Tangible property covered by PPI insurance consists of “physical injury to or destruction of the property and loss of the use of the property so injured or destroyed” (MCL 500.3121(3)). 

We understand that pulling a definition right from the statute can be confusing. In layman’s terms, PPI insurance will cover accident-related damage to property such as trees, fences, or other safely parked cars. This does not include the vehicle the person was driving.

This type of coverage will not pay for damage to other vehicles or trailers if they are parked in a way that causes an unreasonable risk of damage. Additionally, PPI will not cover property damage to utility transmission poles, lines, wires, or cables arising from the failure of a “municipality, utility company, or cable television company.” 

PPI insurance claims must be filed by a property owner no more than one year after the date the accident occurs.

What if You Drive Out of State: Will PPI Work?

No, property protection insurance will not pay to cover damage to other vehicles or property if the accident occurs out of the state of Michigan.

Will PPI Insurance Payment Depend on Fault?

No, property protection insurance payments are not made on the basis of fault for the incident. This is handled like other no-fault insurance in this state.

How Much Will PPI Pay?

The total amount that property protection insurance will cover depends on a variety of factors. Under the law, PPI will pay “the lesser of reasonable repair costs or replacement costs less depreciation and, if applicable, the value of loss of use.” There cannot be a PPI payout that will exceed $1,000,000. If you need help with this process, please reach out to one of our Southfield car accident lawyers today.