The Automobile Insurance Secret that Everyone In Michigan Should Know!

Michigan has no-fault insurance.  As a result, each person is expected to insure his or her own car.  Part of that insurance is for collision, and part is for liability.   Your own insurance company will pay all of your hospital and medical costs arising out of an accident.  In addition, your own insurance provides you with wage losses for up to three years.  However, you can sue or be sued for pain and suffering caused by the accident and you can sue or be sued for wages losses that could be accrued after the first three years.

In Michigan, you are legally required to purchase insurance that provides at least $20,000 in coverage for pain and suffering and wage loss to someone you hurt (and $40,000 total if more than one person is injured).  In addition, insurance companies provide you with Uninsured Motorist coverage.  In other words, you can have $500,000/$1,000,000 Uninsured Motorist coverage so that if someone else causes an accident and hurts you or your passengers and the person causing the accident is uninsured, your own insurance coverage will provide up to $500,000 for pain and suffering and potential wage loss for one person and up to $1,000,000 in coverage if there were more than one person injured.

Great, right?  Not at all.  Let’s assume that, God-forbid, you are seriously injured and the person that caused the accident has a $20,000/$40,000 policy.  If you cannot work the rest of your life or if you have to take lesser or part-time employment the rest of your life, you will have a problem.  Your own policy will cover your medical costs and wage losses for 3 years, but you are going to suffer wage losses for much longer than that.  You might think your Uninsured Motorist coverage would help, but you would be dead wrong.  You see, the person that hit you was insured, but only for a paltry amount that is not going to help you after your three years of wage loss benefits are exhausted!  The person that hit you was UNDERINSURED.

Here’s the secret:  Automobile insurance companies can offer you Underinsured Motorist coverage along with your Uninsured Motorist coverage.  In fact, every person in Michigan should be required to have Undersinsured Motorist coverage, but that is not required by the Michigan Legislature.  Underinsured Motorist coverage is typically inexpensive, so it won’t cost that much for you to add it to your policy.  So, the next thing you should do after reading this post is to call your insurance agent and add Underinsured Motorist coverage to your policy!