The Michigan new-car insurance grace period is 7 to 30 days in most cases. The new-car grace period is how long insured drivers are allowed to drive a newly purchased vehicle before adding it to an existing car insurance policy. If you don't have a current policy, you'll need proof of personal injury protection, property protection insurance and liability coverage before you can legally drive or register your car in Michigan.
When You Need Insurance to Buy a New Car in Michigan
If you're financing a car, you will probably be required by your lender to have proof of insurance before driving off the lot. You can get the information you need for a policy, like the car's VIN, from the dealership before completing the purchase. If you do have an active policy, your current proof of insurance should be all you need.
If you're paying cash or buying a car outright from a private seller, you probably won't be asked to provide proof of insurance to take possession of the vehicle. Either way, you still have to meet minimum financial responsibility requirements to drive legally in Michigan: $50,000 in bodily injury liability coverage (up to $100,000 per accident), along with $10,000 in liability coverage for property damage and $1,000,000 in property protection insurance. Most drivers must buy personal injury protection (PIP) as well, though there are some exceptions for policyholders with Medicaid or Medicare.
If you lease or finance a car, you'll probably also need collision and comprehensive coverage to protect the lender's investment, which costs an average of $3,397 per year when purchased along with the minimum coverage that your state requires.
How Michigan's New Car Insurance Grace Period Works When You're…
- Replacing your old car with a new car. Most insurance companies offer a 7 to 30 day grace period if you replace a covered vehicle on your policy. The same type and amount of coverage that applies to the car you're replacing will apply to the new one.
- Adding your new car to your existing policy. Not all insurance companies extend coverage if you are adding a new vehicle to your policy without getting rid of an existing car—for example, if you're going from two to three cars. If they do, it will be for a shorter time, usually only several days. If you're adding your new car to your existing policy, you should confirm you have at least the minimum coverage required in Michigan for the car you are buying.
Although you probably have a grace period if you're already insured, it's best not to depend on it. Contact your insurance company as soon as possible to let them know about changes to your policy, especially when it comes to confirming coverage for a new car.
This answer was first published on 08/02/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
