With a seemingly infinite supply of insurance policies to choose from, it’s critical to be fully informed of what coverage plans are worth it and which ones aren’t. We help you make that decision by exploring the options out there for Michigan drivers.
This article explores mandatory car insurance coverages in Michigan.
First, is important know that certain insurance coverage is mandatory. In Michigan, all car insurance policies are no-fault polices and carry personal injury protection (PIP). This means claimants are entitled to no-fault benefits when injured in a car accident. This includes the payment of lost wages, medical expenses, prescription drugs, medical mileage, replacement services, as well as other benefits.
PIP benefits are available to almost all individuals involved in a car accident. This can even include passengers and pedestrians who don’t carry auto insurance or don’t even own a car.
For example, if you don’t own a car or even live with anyone who owns a car, but you are a passenger and severely injured in a car accident, you are still entitled to receive Michigan no-fault benefits. Typically in this situation, the auto insurance company for the owner of the vehicle you occupied would be on the hook for paying these benefits.
Other mandatory coverages include property protection (PPI) and residual bodily injury (BI). PPI pays up to $1 million for damage your vehicle causes to other people’s property, such as bridges or storefronts.
Bodily injury is the coverage that protects you in case you cause a car accident. It covers the defense costs and damages if you are found liable for causing injury due to a car accident.
In Michigan, the minimum amount of BI coverage is $20,000 per person/$40,000 per accident. This means the most the insurance company has to pay is $20,000 to one person and $40,000 in total for the entire accident if multiple people are injured.
Although the state minimum is $20,000, we highly recommend you purchase a much higher BI limit. You never know what may happen while driving a car. One mistake can cause catastrophic injury. If your insurance company is only obligated to pay $20,000 in coverage, you are leaving yourself open to a situation where the victim can come after your personal assets, including your home, wages and personal property.
Most people don’t realize this but the additional expense in buying higher BI limits is minimal. The difference between $20,000 and $100,000 in coverage is sometimes only $50 or less. When purchasing auto insurance, or renewing your policy, always ask your insurance agent about the cost of increasing coverage!
Believe it or not in Michigan, it is not mandatory to ensure your car for vehicle damage. That type of insurance coverage, as well as others, will be explored in Part 2 of this article.
The Lee Steinberg Law Firm, P.C. has been handling Michigan car wrecks for over 40 years. We have recovered tens of millions of dollars for our clients. Call our experienced and hard working team of Michigan car accident attorneys with any questions you have.
Please call us at 1-800-LEE-FREE (1-800-533-3733).