In most states, drivers are required by state law to have a minimum amount of liability coverage. In Michigan, the minimum amount is $20,000. This is insurance to pay for damages to others if you cause an accident. You can pay for greater coverage if you wish. This may protect you from loss if you are found liable in a vehicular accident. Remember, liability insurance pays only to settle claims or pay judgments against you if you are found negligent.
To protect yourself from other drivers who cause a car, truck or motorcycle accident, you can purchase a coverage known as uninsured or underinsured motorist benefits. This allows you to receive compensation from your own insurance company if a negligent driver has limited liability insurance. If the amount of your damages exceeds the negligent party’s coverage, you can make a claim under this coverage from your own company.
Medical expenses, such as hospital and doctors bills, are paid by the no-fault insurance carrier. The no-fault insurance carrier may be your own auto carrier or some other carrier, depending on the facts of the case. Please be aware that as long as you are not driving an uninsured motor vehicle that you own, you are eligible for no-fault benefits. You do not need to have auto insurance or even own a car to be eligible for no-fault benefits.
Every auto policy in Michigan is a no-fault policy.
Collision coverage is a type of voluntary coverage you may wish to purchase from your insurance company. This covers repairs or replacement to your vehicle after an accident. There is usually a deductible that must be paid before your insurance company will pay for the collision damage. In Michigan, the at-fault vehicle, or the vehicle that caused the collision damage, is only liable for $500, even if the damage they cause is significantly higher.