Most Michigan residents know they are legally required to carry car insurance on all of their motor vehicles. But what are you required to have? And what additional insurance is a good idea?
Michigan No-Fault Insurance
Every Michigan driver must carry no-fault insurance on their vehicles. No-fault actually includes three different auto insurance policies:
Personal Injury Protection (PIP)
This is the policy that covers all of your reasonable and necessary medical expenses if you are hurt in an auto accident. It includes three years of wage loss and replacement services. For more information about your PIP policy, check out the No-Fault Insurance Claim page.
Property Protection (PPI)
If your accident causes damage to buildings, fences, or the roadway, your PPI will pay up to $1 million for the damages fences. This only covers damage done to other people’s property.
Residual Bodily Injury and Property Damage Liability (BI/PD)
Michigan residents are required to carry BI/PD which pays any time you cause an auto accident in which someone was killed or seriously injured. The minimum limits of coverage are $20,000 per person, $40,000 per accident (if several people are hurt or killed), and up to $10,000 for damage in another state.
Optional Additional Auto Insurance Policies
Your Michigan no-fault insurance won’t cover all of the damage caused by an accident – like the repairs to your own car – but there are optional auto insurance policies that can fill the gaps.
Your optional collision insurance policy will cover the cost of repairing your car after an accident. Policies are based on the value of your vehicle. Your monthly payment depends on the total policy value and the deductible you have to pay before the policy will kick in. You can save money by increasing your deductible, but make sure you have the savings along with a high enough policy limit to pay to replace your car if it is totaled.
Your Michigan no-fault insurance and collision insurance policies only apply when there is an auto accident. Not when your vehicle is parked. If your car is damaged by weather, animals, or theft, you will have to rely on your comprehensive insurance policy to cover the cost of those repairs.
If you pay a car loan to a bank or auto lender, you may be required to maintain collision and comprehensive insurance policies for the full value of the car. Make sure you read your loan contract before reducing your limits or canceling your policy.
Uninsured Motorist Coverage
Just because Michigan drivers are legally required to have insurance doesn’t mean they always do. In case you get hit by someone who doesn’t have enough insurance to cover your damages, you may want to purchase uninsured or underinsured motorist coverage.
The required and optional auto insurance policies available in Michigan can be confusing, but the auto accident attorneys at Christensen Law can help you understand what you are entitled to under your auto insurance policies.