If another driver hurt you and carried no insurance, or nowhere near enough of it, the thing that decides whether you actually collect is uninsured and underinsured motorist coverage, usually written as UM and UIM. Michigan treats this coverage differently from most states, and the differences are the kind that quietly cost people money after a crash. Here is what is true in Michigan, with the statutes and cases behind each point.
Michigan does not require it
State law makes three coverages mandatory on every auto policy: Personal Injury Protection (PIP), Property Protection (PPI), and Residual Bodily Injury and Property Damage Liability.1 Uninsured and underinsured motorist coverage is not on that list. It is optional, and the Michigan Supreme Court has said so plainly.12 Many drivers drop it to shave a few dollars off the premium without grasping what they gave up.
That one fact drives almost everything else about how UM works here.
It is a contract, not a statute
In many states, uninsured motorist coverage is built into the law, with minimum limits and consumer protections that override the fine print. Michigan is not one of them. In Rory v. Continental Insurance Co., the Michigan Supreme Court held that because UM coverage "is not compulsory coverage mandated by the no-fault act," the rights and limitations of that coverage "are purely contractual."2
The practical translation is blunt: your policy language controls, and courts enforce it as written. In Rory the Court upheld a clause requiring the insured to bring any UM claim within one year of the crash, even though the ordinary deadline to sue a negligent driver is three years.23 Its reasoning was that the Legislature barred shortened limitation periods only for life insurance, so nothing stopped an auto insurer from writing a one-year window into the policy.2 The limits and the deadline are whatever you agreed to. Pull your declarations page and the UM endorsement and read them before you need them.
What UM and UIM actually pay in a no-fault state
Michigan runs on no-fault, so your own PIP coverage pays your medical care and wage loss no matter who caused the crash.4 Drivers now pick from six PIP medical levels, ranging from unlimited down to a $50,000 option for people enrolled in Medicaid.15 None of that pays for pain and suffering.
Filling that gap is the job of UM and UIM. They stand in for the at-fault driver and pay the noneconomic damages, the pain and suffering and disability, that you could have recovered by suing that driver directly. Michigan attaches a condition here that surprises people. You can recover noneconomic damages only if your injury meets the tort threshold in MCL 500.3135: death, serious impairment of an important body function, or permanent serious disfigurement.6 A UM claim carries that same threshold. If the injury would not support a lawsuit against an insured at-fault driver, it will not support a UM claim against your own insurer either. The state's own consumer guidance frames the coverage as paying when an uninsured or underinsured motorist "seriously injures" you, which is that threshold in plain words.7
The underinsured gap Michigan's limits create
Since July 1, 2020, a Michigan policy carries default bodily injury liability limits of $250,000 per person and $500,000 per crash. A driver can drop to $50,000 and $100,000, but only by signing a specific DIFS form that selects the lower number.8 Plenty of drivers sign it. So do out-of-state drivers rolling through with even thinner limits.
Say a driver with $50,000 in liability coverage causes $300,000 in harm. That $250,000 shortfall is exactly what underinsured motorist coverage exists to absorb, up to whatever UIM limit you bought. Without UIM you collect the other driver's limit and swallow the rest. Because the coverage is contractual, most policies also "set off" what you receive from the at-fault driver against your UIM limit, so once again the fine print decides how much is really there.
Hit-and-run and phantom vehicles
UM is what you fall back on when the driver who hit you flees and is never identified. Michigan policies bolt strict conditions onto that situation, and the courts enforce them hard.
In DeFrain v. State Farm, a pedestrian was struck by a hit-and-run driver and later died of his injuries. His policy required notice of a hit-and-run claim to the insurer within 30 days, along with a report to police within 24 hours. His family gave the insurer notice at 86 days. The Michigan Supreme Court held the notice provision enforceable and, importantly, ruled that the insurer did not have to prove the late notice prejudiced it. The claim was gone.9 Many Michigan policies also demand actual physical contact with the unknown vehicle, so a driver who swerves to avoid a phantom car and crashes can find there is no coverage at all. Because UM is a creature of contract, those conditions generally hold up.2
If you are in a hit-and-run, call the police at once and get the crash report; the clock on your own policy's notice conditions starts at the moment of the crash.
Deadlines are shorter than the three-year rule you have heard
The three-year statute of limitations in MCL 600.5805(2) governs a tort lawsuit against the driver who hit you.3 It does not govern your claim against your own insurer for UM or UIM benefits. That is a breach-of-contract claim, and as Rory confirmed, the policy can cut your window to as little as one year.2 Drivers who assume they have three years to sort everything out have lost UM rights months earlier without knowing it. If a UM or UIM claim looks possible, treat the deadline as short and confirm the exact date in your policy. This is where finding a lawyer early genuinely matters.
The Assigned Claims Plan is not a substitute
When the at-fault vehicle is uninsured and no insurer can be identified, an injured person can apply to the Michigan Assigned Claims Plan (MACP) for PIP benefits, capped at $250,000 in medical.1 It helps, but it is narrow. MACP is a PIP backstop that pays medical and wage-type benefits. It does not pay the pain-and-suffering recovery that UM coverage does. For the human cost of a crash caused by an uninsured driver, UM coverage is what pays, not the Assigned Claims Plan.
People also mix up UM with Michigan's mini-tort. That is limited property damage liability, it is optional, and it lets you recover up to $3,000 for vehicle damage the at-fault driver's insurance did not cover when that driver is at least 50% at fault.1 It has nothing to do with your injuries. For what your car itself loses in value after a wreck, see the Michigan diminished value guide.
What this means for you
Uninsured motorist coverage in Michigan is optional and easy to skip, and skipping it is one of the costlier mistakes a Michigan driver can make. Because the coverage lives entirely inside the contract, do two things now, while nothing is on fire: confirm you actually carry UM and UIM, and read the deadline and notice conditions on the endorsement. If an uninsured or underinsured driver hurts you, those conditions, not the general three-year rule, are what you will be measured against.
This is general information, not legal advice.
Sources
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State of Michigan, Auto Insurance Frequently Asked Questions (mandatory coverages, PIP levels, Michigan Assigned Claims Plan, mini-tort). https://www.michigan.gov/autoinsurance/frequently-asked-questions
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Rory v. Continental Insurance Co., 473 Mich. 457; 703 N.W.2d 23 (2005). https://www.courtlistener.com/opinion/848614/rory-v-continental-ins-co/
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Michigan Compiled Laws section 600.5805(2) (three-year limitations period for injury). https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-600-5805
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Michigan No-Fault Act, Michigan Compiled Laws section 500.3101 et seq. https://www.legislature.mi.gov/Laws/MCL?objectName=MCL-500-3101
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Michigan Compiled Laws section 500.3107c (PIP medical coverage level options). https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-500-3107c
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Michigan Compiled Laws section 500.3135 (tort liability threshold; limited property damage). https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-500-3135
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Michigan Department of Insurance and Financial Services (DIFS), Purchasing Auto Insurance FAQ. https://www.michigan.gov/difs/news-and-outreach/faq/insurance/info-purchasing-auto-insurance
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Michigan Compiled Laws section 500.3009 (bodily injury liability limits). https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-500-3009
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DeFrain v. State Farm Mutual Automobile Insurance Co., 491 Mich. 359; 817 N.W.2d 504 (2012). https://www.courtlistener.com/opinion/824745/nancy-jane-defrain-v-state-farm-mutual-automobile-/