MCL § 500.3101 – Mandatory no-fault auto insurance requirement
Table of Contents
Code Details
Chapter 500
Act 218 of 1956
218-1956-31
Exact Statute Text
Click to view the complete statute text
* 500.3101 THIS SECTION IS AMENDED EFFECTIVE OCTOBER 17, 2025: See 500.3101.amended *
500.3101 Security for payment of benefits required; period security required to be in effect; definitions; policy of insurance or other method of providing security; filing proof of security; exclusion.
Sec. 3101.
(1) Except as provided in sections 3107d and 3109a, the owner or registrant of a motor vehicle required to be registered in this state shall maintain security for payment of benefits under personal protection insurance and property protection insurance as required under this chapter, and residual liability insurance. Security is only required to be in effect during the period the motor vehicle is driven or moved on a highway.
(2) Except as provided in section 3107d, all automobile insurance policies offered in this state must include benefits under personal protection insurance, and property protection insurance as provided in this chapter, and residual liability insurance. Notwithstanding any other provision in this act, an insurer that has issued an automobile insurance policy may only delete portions of the coverages under the policy and maintain the comprehensive coverage portion on a motor vehicle that is not driven or moved on a highway in accordance with section 3009(4).
(3) As used in this chapter:
(a) “Automobile insurance” means that term as defined in section 2102.
(b) “Commercial quadricycle” means a vehicle to which all of the following apply:
(i) The vehicle has fully operative pedals for propulsion entirely by human power.
(ii) The vehicle has at least 4 wheels and is operated in a manner similar to a bicycle.
(iii) The vehicle has at least 6 seats for passengers.
(iv) The vehicle is designed to be occupied by a driver and powered either by passengers providing pedal power to the drive train of the vehicle or by a motor capable of propelling the vehicle in the absence of human power.
(v) The vehicle is used for commercial purposes.
(vi) The vehicle is operated by the owner of the vehicle or an employee of the owner of the vehicle.
(c) “Electric bicycle” means that term as defined in section 13e of the Michigan vehicle code, 1949 PA 300, MCL 257.13e.
(d) “Golf cart” means a vehicle designed for transportation while playing the game of golf.
(e) “Highway” means highway or street as that term is defined in section 20 of the Michigan vehicle code, 1949 PA 300, MCL 257.20.
(f) “Moped” means that term as defined in section 32b of the Michigan vehicle code, 1949 PA 300, MCL 257.32b.
(g) “Motorcycle” means a vehicle that has a saddle or seat for the use of the rider, is designed to travel on not more than 3 wheels in contact with the ground, and is equipped with a motor that exceeds 50 cubic centimeters piston displacement. For purposes of this subdivision, the wheels on any attachment to the vehicle are not considered as wheels in contact with the ground. Motorcycle does not include a moped or an ORV.
(h) “Motorcycle accident” means a loss that involves the ownership, operation, maintenance, or use of a motorcycle as a motorcycle, but does not involve the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle.
(i) “Motor vehicle” means a vehicle, including a trailer, that is operated or designed for operation on a public highway by power other than muscular power and has more than 2 wheels. Motor vehicle does not include any of the following:
(i) A motorcycle.
(ii) A moped.
(iii) A farm tractor or other implement of husbandry that is not subject to the registration requirements of the Michigan vehicle code under section 216 of the Michigan vehicle code, 1949 PA 300, MCL 257.216.
(iv) An ORV.
(v) A golf cart.
(vi) A power-driven mobility device.
(vii) A commercial quadricycle.
(viii) An electric bicycle.
(j) “Motor vehicle accident” means a loss that involves the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle regardless of whether the accident also involves the ownership, operation, maintenance, or use of a motorcycle as a motorcycle.
(k) “ORV” means a motor-driven recreation vehicle designed for off-road use and capable of cross-country travel without benefit of road or trail, on or immediately over land, snow, ice, marsh, swampland, or other natural terrain. ORV includes, but is not limited to, a multitrack or multiwheel drive vehicle, a motorcycle or related 2-wheel, 3-wheel, or 4-wheel vehicle, an amphibious machine, a ground effect air cushion vehicle, an ATV as defined in section 81101 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.81101, or other means of transportation deriving motive power from a source other than muscle or wind. ORV does not include a vehicle described in this subdivision that is registered for use on a public highway and has the security required under subsection (1) or section 3103 in effect.
(l) “Owner” means any of the following:
(i) A person renting a motor vehicle or having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days.
(ii) A person renting a motorcycle or having the use of a motorcycle under a lease for a period that is greater than 30 days, or otherwise for a period that is greater than 30 consecutive days. A person who borrows a motorcycle for a period that is less than 30 consecutive days with the consent of the owner is not an owner under this subparagraph.
(iii) A person that holds the legal title to a motor vehicle or motorcycle, other than a person engaged in the business of leasing motor vehicles or motorcycles that is the lessor of a motor vehicle or motorcycle under a lease that provides for the use of the motor vehicle or motorcycle by the lessee for a period that is greater than 30 days.
(iv) A person that has the immediate right of possession of a motor vehicle or motorcycle under an installment sale contract.
(m) “Power-driven mobility device” means a wheelchair or other mobility device powered by a battery, fuel, or other engine and designed to be used by an individual with a mobility disability for the purpose of locomotion.
(n) “Registrant” does not include a person engaged in the business of leasing motor vehicles or motorcycles that is the lessor of a motor vehicle or motorcycle under a lease that provides for the use of the motor vehicle or motorcycle by the lessee for a period that is longer than 30 days.
(4) Security required by subsection (1) may be provided under a policy issued by an authorized insurer that affords insurance for the payment of benefits described in subsection (1). A policy of insurance represented or sold as providing security is considered to provide insurance for the payment of the benefits.
(5) Security required by subsection (1) may be provided by any other method approved by the secretary of state as affording security equivalent to that afforded by a policy of insurance, if proof of the security is filed and continuously maintained with the secretary of state throughout the period the motor vehicle is driven or moved on a highway. The person filing the security has all the obligations and rights of an insurer under this chapter. When the context permits, “insurer” as used in this chapter, includes a person that files the security as provided in this section.
(6) An insurer that issues a policy that provides the security required under subsection (1) may exclude coverage under the policy as provided in section 3017.
MCL § 500.3101 Summary
This Michigan statute establishes the fundamental requirement for mandatory no-fault automobile insurance in the state. It specifies that any owner or registrant of a motor vehicle that needs to be registered in Michigan must maintain “security” – typically an insurance policy – for the payment of Personal Protection Insurance (PIP) benefits, Property Protection Insurance (PPI) benefits, and residual liability insurance. This security is only necessary for the periods when the vehicle is operated or moved on a public highway.
The statute clarifies that all auto insurance policies offered in Michigan must include these core no-fault coverages. It also provides a comprehensive list of definitions for key terms used throughout the no-fault chapter, such as “motor vehicle,” “motorcycle,” “owner,” “highway,” and various types of vehicles excluded from the “motor vehicle” definition for no-fault purposes (e.g., mopeds, golf carts, ORVs, electric bicycles). It outlines that this required security can be provided by an authorized insurer or by an alternative method approved by the Secretary of State, as long as it offers equivalent security.
Purpose of MCL § 500.3101
The legislative intent behind this particular section is to establish the foundation of Michigan’s no-fault automobile insurance system. The primary goal is to ensure that individuals injured in motor vehicle accidents receive prompt and adequate compensation for their medical expenses and other economic losses, regardless of who was at fault for the collision. By mandating Personal Protection Insurance (PIP), the statute aims to reduce litigation over fault for minor injuries, streamline the claims process, and provide quick access to benefits for accident victims. The inclusion of Property Protection Insurance (PPI) covers certain damages to property, while residual liability insurance ensures coverage for serious injuries or damages that exceed the no-fault limits, where fault can still be assigned. This statute serves as a cornerstone, aiming to protect the public from the financial burden of auto accidents by requiring a minimum level of financial responsibility from all registered vehicle owners.
Real-World Example of MCL § 500.3101
Imagine Sarah buys a new car in Michigan. Before she can legally drive it off the dealership lot or register it with the Secretary of State, MCL § 500.3101 requires her to obtain an automobile insurance policy. This policy must include Personal Protection Insurance (PIP), Property Protection Insurance (PPI), and residual liability coverage. If Sarah fails to get this insurance and is involved in an accident while driving on a Michigan highway, she would be in violation of this statute. Not only could she face legal penalties for driving uninsured, but she would also be barred from collecting no-fault benefits (like medical expenses and lost wages) that she might otherwise be entitled to, even if another driver was at fault for the accident. Conversely, if Sarah properly insures her vehicle, and later gets into an accident, her insurance company would begin paying her eligible medical bills and other no-fault benefits, thanks to the mandatory security she maintained as required by this law.
Related Statutes
- MCL § 500.3107d (Personal Protection Insurance Options): This section, referenced as an exception in MCL § 500.3101, details the various options available for Personal Protection Insurance (PIP) coverage, including choices for unlimited medical benefits, capped medical benefits, or opting out of PIP medical coverage under specific conditions. It directly impacts the specific “security” required by 3101.
- MCL § 500.3109a (Coordination of Benefits): Also referenced as an exception in MCL § 500.3101, this statute allows individuals to coordinate their no-fault PIP benefits with other health and disability insurance coverages, potentially reducing their automobile insurance premiums.
- MCL § 500.3009(4) (Deletion of Coverage for Stored Vehicles): This subsection, mentioned in MCL § 500.3101(2), allows an insurer to delete certain coverages while maintaining comprehensive coverage for a vehicle that is not actively driven on a highway. This is relevant for owners who store vehicles seasonally or long-term and wish to reduce their premium while keeping some protection.
- MCL § 500.3103 (Motorcycle Security Requirements): While motorcycles are generally excluded from the “motor vehicle” definition for the purpose of mandatory PIP benefits under MCL § 500.3101, this section specifically addresses the security requirements for motorcycles, mandating liability insurance for owners and operators.
- MCL § 500.3017 (Permissible Exclusions from Coverage): Referenced in MCL § 500.3101(6), this statute outlines specific circumstances under which an insurer may exclude coverage from a policy, such as when a vehicle is used in a car business, or operated without the owner’s permission.
Case Law Interpreting MCL § 500.3101
The provisions of the no-fault act, particularly MCL § 500.3101 regarding mandatory insurance, have been subject to extensive judicial interpretation, especially concerning the definitions of “owner” and “motor vehicle” and the consequences of non-compliance.
- In *Titan Ins. Co. v. Hyten*, 491 Mich. 547, 817 N.W.2d 562 (2012), the Michigan Supreme Court delved into the definition of “owner” under MCL § 500.3101(2)(l) (now 3101(3)(l)), addressing situations where a vehicle is operated without insurance. The case clarified that an individual who fails to register a vehicle but has use of it for over 30 days can be considered an “owner” and is consequently subject to the no-fault act’s requirements and penalties for non-compliance. The court affirmed the critical importance of proper vehicle registration and insurance for participation in the no-fault system. You can find this case by searching on Google Scholar for “Titan Ins. Co. v. Hyten”.
- The case of *Twist v. Aetna Cas. & Sur. Co.*, 413 Mich. 592, 319 N.W.2d 542 (1982), while predating some of the more recent no-fault reforms, underscored the mandatory nature of the security requirement under MCL § 500.3101. The court affirmed that the provision of security (auto insurance) is a prerequisite for legal operation of a motor vehicle on public highways in Michigan and emphasized the broad scope of protection intended by the no-fault act for accident victims who comply with the law. You can find this case by searching on Google Scholar for “Twist v. Aetna Cas. & Sur. Co.”.
Why MCL § 500.3101 Matters in Personal Injury Litigation
MCL § 500.3101 is absolutely foundational to personal injury litigation in Michigan because it dictates who is entitled to no-fault benefits and under what circumstances. For plaintiffs, establishing compliance with this statute is often the first hurdle. If a plaintiff was driving or was the owner of an uninsured motor vehicle involved in an accident, they are generally barred from recovering Michigan no-fault benefits (such as medical expenses, lost wages, and replacement services) under the “uninsured owner” rule. This makes proof of valid insurance coverage a critical component of a personal injury claim from the outset.
Defense attorneys, on the other hand, frequently examine a plaintiff’s insurance status following an accident. If the plaintiff or their vehicle’s owner was uninsured, it can be a powerful defense argument to deny no-fault benefits entirely. Furthermore, the statute’s detailed definitions of “motor vehicle,” “owner,” and various excluded vehicles are frequently litigated. For example, whether an “ORV” or “moped” involved in an accident constitutes a “motor vehicle” under this section can dramatically alter the availability of no-fault benefits. Lawyers must carefully analyze these definitions to determine the applicable insurance rules and the potential for recovery or defense. Understanding this statute is not just about legality; it directly impacts case strategy, settlement negotiations, and the ultimate outcome of Michigan personal injury claims for both clients and their legal representatives.