What is Covered on Auto insurance in Michigan?
Michigan auto insurance follows the No-Fault system and the state requires it for all cars. When you Register your vehicle, there are mandatory coverage’s that you must have for auto insurance in Michigan. The basic no-fault Michigan auto insurance policy has three required parts.
Bodily Injury and Property Damage (BI/PD)
The first section is bodily injury and property damage; this coverage will protect you and your assets from lawsuits as the result of an auto insurance accident. In Michigan, someone can sue you if you cause an injury to the other driver, passenger or pedestrian. This coverage also covers the cost of defending you in any suit for damages and for your defense in addition to your liability limit.
Michigan auto insurance requires you to carry these minimum limits:
- $20,000 per person who is hurt or killed in an accident.
- $40,000 for each accident if several people are hurt or killed.
- $10,000 for property damage in another state.
These limits are shown as 20/40/10 on your policy. If there is a lawsuit against you, the court could award a judgment for more than these limits. The judgment will usually depend on the severity of the accident and the assets that you have available. You should carry higher liability limits than the state minimum. Discuss this with a local Michigan insurance agent to see what coverage might be right for you; these limits can go as high as 1 million/1million/1 million.
Property Protection Insurance (PPI)
No-Fault will pay up to $1 million for damages that you cause in Michigan to another party’s property, such as a parked auto, building, fence. If the damage is out of state, the property damage limits that you have will apply.
Michigan Personal Injury Protection (PIP)
This part of no-fault auto insurance policy pays all necessary medical costs from an injury in an auto insurance accident. Michigan is the only state in the country that offers unlimited medical. Michigan can do that by adding an assessment (MCCA) to all Michigan auto insurance policies (as of 2018 this fee was $192.00).
Lost wages are also paid if you are unable to work due to accident-related injuries. PIP will pay up to 85% of your gross income for up to 3 years. The coverage varies according to your salary and is capped at a maximum payout limit as set by the state as of 2019 this limit was ($5700) this figure is updated every October.
Survivors’ payments are the amount that the insurance company pays to the survivor as part of the claim if someone dies as a result of the auto insurance accident.
Funeral expenses help pay for the related funeral expense if the covered individual dies as a result of the accident. This limit can vary between $1750 -$5000 per person.
Replacement services will pay up to $20 per day for three years if you need help performing household duties or other tasks due to accident-related injuries.
Michigan requires this minimum coverage’s for all registered autos. To get coverage for damage to your auto, you will have to purchase the optional coverage’s listed below.
Michigan Auto Insurance Physical Damage Coverage
Collision pays to repair or replace your vehicle if an accident causes damages. There are three types of auto insurance collision coverage available in Michigan. This coverage will pay for the damages as long as they don’t exceed your car’s actual cash value. (Actual cash value is the car’s original purchase price minus the amount it has depreciated)
Standard collision pays for damages to your auto regardless of fault; you will be responsible for paying a deductible if you are a fault.
Broad form collision pays for damages to your auto regardless of fault; You will owe the deductible if you are more than 50% at fault.
Limited Collision pays only if you are less than 50% at fault. This coverage will not pay out if you are more than 50% at fault.
This coverage provides protection for damage not resulting from a collision. Examples are theft, glass damage, fire, flood, vandalism, explosion, hail, and contact with birds or animals.
The finance company requires comprehensive and collision coverage if you lease or finance your vehicle.
Optional Michigan auto insurance coverage’s:
Uninsured Motorist Bodily Injury (UM)
Uninsured motorist coverage is optional liability coverage that compensates you for excess wage loss and pain and suffering. This coverage applies if an uninsured driver hits you or a member of your family. Usually, the limits are the same as your bodily injury limits but can be at the state minimum.
Limited Property Damage (LPD)
Under Michigan law, if you are 50% or more at fault in an auto accident, the other driver can sue you for up to $1000.00 of damage not that their policy does not cover. If you purchase this coverage, your policy will pay up to the $1000 to the other party’s collision coverage. If you are hit and need to know how to get your deductible back go to How to file a mini-tort claim.
Optional Michigan auto insurance coverage’s
Rental Car Coverage
Rental is an optional coverage that will pay a daily amount towards a rental car for a collision or comprehensive claim while your vehicle is in the shop. Coverage is for a specific amount, and you will owe for the additional cost.
Emergency Road Service
Road Service is an optional coverage that pays towards the cost to have your vehicle towed or other emergency services.