From uninsured crash to a Michigan judgment suspension
The Department of State's financial responsibility FAQ lays out the chain. Someone drives without insurance and is at fault in a crash. The injured person sues and wins a judgment for damages.
If the uninsured driver cannot pay it, the license is suspended until the judgment is paid in full. Michigan sets no fixed number of months. The suspension ends when the debt does, or when you qualify for a restricted license.
A restricted license while you pay the debt down
You can apply for a financial-responsibility restricted license. It lets you drive only the vehicles stated on the license. To get one, you file two things with the Driver Record Activity Unit in Lansing.
The first is a partial-payment agreement, signed by both sides of the judgment. It states how much you pay, when, and to whom. The second is proof of financial-responsibility insurance.
Some injured parties refuse to sign. Then you can ask for a hearing at the court that entered the judgment. The judge can enter an Order Regarding Installment Payments, and a certified copy goes to the same unit.
Owner's policy, operator's policy, or both
In Michigan this proof is an ordinary no-fault policy that also meets the extra terms set for judgment cases. An owner's policy insures any vehicle registered in your name. An operator's policy insures you in vehicles not registered to you, much like a non-owner SR-22 elsewhere. You can carry either one or both.
Buying another car resets part of the process. You apply for a new policy on that vehicle, and the insurer sends the state a new certificate. Until the new restricted license is issued, you are not licensed to drive the new car.
Why Lansing needs the certificate, not your application
You apply with an agent of your choosing. The application goes to the insurer's home office, which supplies the state with the certificates. That process can take between two and four weeks.
The Department of State is blunt about one point. An application for insurance is not acceptable. Only the certificate counts, so start the policy early.
The $125 fee and the liability limits Michigan allows
Under MCL 257.320e, most suspended, revoked or restricted drivers pay a $125 reinstatement fee before a license is issued or returned. The reinstatement fee page offers online and mail payment for some transactions, plus office visits. Card payments carry added fees.
The state's auto insurance site sets the default at $250,000 per person and $500,000 per crash. The lowest you can buy is $50,000 and $100,000, plus $10,000 for property damage in another state. Going without coverage is a misdemeanor, with a fine of up to $500 and up to one year in jail, per DIFS.