Shopping for car insurance is a stressful and sometimes a frustrating experience. But it doesn’t have to be. So long as you do a little research in advance and know what to expect, the experience can be less daunting and even pain free.
First, it is important to know what type of auto insurance to purchase. In Michigan, all auto insurance policies are no-fault policies. This means if you are injured in a car accident, you are entitled to certain benefits even if you caused the accident. These benefits are called no-fault benefits and include things like wage loss benefits, the payment of hospital and doctor bills, household chores, reimbursement of prescription drugs and other benefits.
All no-fault policies also carry what’s called Residual Bodily Injury (BI). This is the coverage that pays out claims for personal injury if you cause an accident. It also pays defense attorney costs. The state minimum in Michigan is $20,000 per person and $40,000 per accident. Although a 20/40 policy is the state minimum, I encourage you to purchase a higher limit because you never know what can happen.
This is especially important if you have personal assets worth more than $20,000. Without the added insurance protection, if you cause a horrible car accident, you are opening up yourself to a potential personal judgment.
So when you purchase a policy, you will automatically receive a no-fault policy with bodily injury protection. But what else? Under Michigan law, you are responsible for insuring your own car for vehicle damage. Even if another person crashes into your vehicle, the most you can obtain is $1,000 for the vehicle damage. This is called a mini-tort claim.
To protect yourself, you must purchase collision coverage. This type of coverage allows you to go through your own insurance company for repair work or for a check if the car is totaled.
Besides collision coverage, another optional coverage everybody should purchase is uninsured motorist and underinsured motorist coverage. Many drivers on Michigan’s roadways are driving without insurance. If you get hit by one of these individuals, it is very difficult to get adequate compensation.
In these situations, you can go through your own insurance company for compensation for pain and suffering. In effect, you own carrier steps into the shoes of the uninsured or underinsured motorist who caused the car accident.
But how do you properly shop for these types of insurance policies? Here are few helpful hints:
- First, don’t purchase car insurance from a captive insurance agent. A captive insurance agent works for a specific auto carrier and only sells policies for that one carrier. The classic example is the State Farm agent. Captive agents are generally nice people but they don’t shop multiple insurance companies for the best price. They simply sell you the insurance for the company they work for. As a result, you usually don’t receive the best insurance for the lowest price.
- So instead of using a captive agent, use an independent agent. An independent agent represents and sells insurance from more than one carrier. Independent agents can be found in the Yellow Pages or online. Another great way to find a reputable independent agent is by asking friends and co-workers. Don’t be afraid to ask.
- The Internet is your friend. A good way to compare prices is by shopping online. This is a quick and easy way to comparison shop and get quotes. But be careful. Insurance companies have gamed the online system. After obtaining your information, and through the use of specific algorithms, they can intentionally price you out when comparison shopping. The good old telephone is often the best way to get a solid car insurance quote.
- The service you receive from the car insurance company following a claim is vitally important. A good resource is the Michigan Department of Insurance and Financial Service (DFIS). This organization run by the State of Michigan displays a complaint ratio information.
- Ask people in the know. Although we all trust our family and friends, unfortunately they are not always experts, especially when it comes to car insurance. That’s why you should ask people in the know. Call lawyers or business owners who have dealt with insurance in the past. Very often they can give you the quick low down on who is good at paying out a claim and who is not. Heck you can even call us!
Purchasing car insurance does not have to be a scary thing. It is important to be prepared and knowledgeable. If you have any questions about Michigan car insurance, please contact the Michigan car accident attorneys at the Lee Steinberg Law Firm, P.C. We fight hard for our clients and we have collected tens of millions of dollars on their behalf.
You can reach us at 1-800-LEE-FREE (1-800-533-3733). The call is free and we will answer any questions you have.