Michigan Property & Casualty Insurance License Exam — All Questions
4 questions
How is Michigan's personal auto system best characterized?
- a.A pure tort state with no first-party medical coverage
- b.An add-on PIP state that is not no-fault
- c.A no-fault state that requires personal injury protection (PIP)✓
- d.A state with no compulsory auto insurance
Michigan is a no-fault state: a personal auto policy must include personal injury protection (PIP), which pays the insured's own medical and related benefits regardless of fault, alongside residual bodily-injury/property-damage liability. Confirm current requirements with the Michigan Department of Insurance and Financial Services (DIFS).
Which coverage is distinctive to Michigan's no-fault auto system and pays for damage the insured's vehicle causes to others' tangible property (such as buildings and properly parked vehicles) within Michigan?
- a.Property Protection Insurance (PPI)✓
- b.Comprehensive (other-than-collision)
- c.Guaranteed Asset Protection (GAP)
- d.Mechanical breakdown coverage
Michigan requires Property Protection Insurance (PPI), which pays up to a statutory limit for damage the insured vehicle does to other people's property and to properly parked vehicles in Michigan. It is separate from liability and from physical-damage coverage on the insured's own car. Verify the current PPI limit with the Michigan DIFS.
Under Michigan's 2019 no-fault reform, what choice did drivers gain regarding PIP medical coverage?
- a.The ability to drop all bodily-injury liability
- b.The ability to select among PIP medical coverage levels rather than being required to carry a single unlimited level✓
- c.The ability to insure a vehicle with no coverage at all
- d.The elimination of Property Protection Insurance
Michigan's 2019 reform (phased in from 2020) let drivers choose among PIP medical coverage options instead of the previously mandatory unlimited lifetime medical benefit, with certain opt-outs for qualifying drivers. The exact coverage tiers and eligibility rules are set by law; confirm current options with the Michigan DIFS.
Because Michigan is a no-fault state, an at-fault driver's exposure to being sued for property damage to another person's vehicle is:
- a.Unlimited, just like a tort state
- b.Completely barred in every situation
- c.Limited by Michigan's 'mini-tort' rule to a small statutory amount✓
- d.Handled only by the state, not by insurers
Michigan's no-fault law generally channels vehicle-damage recovery through each owner's own collision coverage, but the 'mini-tort' provision lets a driver recover a limited statutory amount from the at-fault driver for uncovered vehicle damage. The exact mini-tort dollar cap is set by statute and can change; verify the current figure with the Michigan DIFS.