Understanding Detroit Auto Insurance

Detroit auto insuranceWhat you need to know about Detroit auto insurance

Detroit auto insurance is required under Michigan No-Fault law.  In order to register your vehicle there are certain coverage’s that you must have in understanding Michigan auto insurance you need to know that the basic  no fault policy has three required parts.

Auto Bodily Injury and Property Damage (BI/PD)

The first section is bodily injury and property damage; this coverage will protect you and your assets if you are sued as the result of an auto accident. In Michigan you can be sued if you injure someone with your vehicle causing a substantial injury to the other driver, passenger or pedestrian. This coverage also covers the cost of defending you in any suit for damages and also pays for the cost of the defense in addition to your liability limit.

The state 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 usually shown as 20/40/10.  If there is a lawsuit against you the court could award a judgment in access of these limits this will usually depend on the severity of the accident and your assets that you have available.  It is recommended that you carry higher liability limits than are required. You should discuss this with a local auto insurance agent  to discuss what limits might be right for you, usually 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 or sign post.  If the damage is caused out of state the limits will be determined by what you selected from the property damage limit that you selected.

Personal Injury Protection (PIP)

This part of no-fault policy pays all necessary medical costs if you are hurt in an auto accident. Michigan is the only state in the country that offers unlimited medical. Michigan is able to do that by adding an assessment (MCCA) to all Michigan auto’ policies as of 2010 this fee was $124.89.

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. This limit on this coverage varies according to your salary and is capped at maximum payout limit as set by the state as of 2010 this limit was ($4878) this figured is updated every October.

Survivors’ payments this is an amount that can be paid to the survivor based on the assessment of the claim if the insured dies as a result of the auto accident.

Funeral expenses PIP helps pay for related funeral expense if the covered individual dies as a result of the auto accident.  This limit is capped at $1750 per person.

Replacement services PIP will pay up to $20 per day for 3 years if you need help performing household duties or other tasks due to accident related injuries.

These coverage’s are the minimum required by law for all Michigan registered autos. If you want coverage for damage to your auto you will have to purchase the optional coverage’s listed below.

Detroit Auto Insurance Physical Damage Coverage

Collision coverage

Collision pays to repair or replace your vehicle if it is damage in an accident. There are 3 types of 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 only have to pay the deductible if you are found to be more than 50% at fault
  • Limited Collision pays only if you are less than 50% at fault a deductible may or may not apply depending on if you had one with this option.  If you are more than 50% at fault nothing is paid.

Comprehensive coverage

(this coverage is sometimes called other than collision by some insurance companies) provides protection for damage not resulting from a collision such as: theft, glass damage, fire, flood, vandalism, explosion, hail and contact with birds or animals.

Comprehensive and collision coverage is usually required by the finance company if your vehicle is leased or financed. Usually they will also require that your deductibles can’t be higher than $500.

Optional liability coverage’s that you can purchase

Uninsured Motorist Bodily Injury (UM)

Uninsured motorist coverage is an optional liability coverage that compensates you for excess wage loss and pain and suffering. This coverage only applies if a hit and run driver or an uninsured driver hits you or a member of your family. Usually these limits are the same as your bodily injury limits, but some companies will offer it at the state minimum.

Limited Property Damage (LPD)

Under Michigan law, if you are 50% or more at fault in an accident, you can be sued for up to $500 for damage not covered by the others person’s collision coverage. This coverage is also called mini-tort.  If you purchase this coverage, your policy will pay up to the $500 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.

Detroit auto insurance optional coverages:

Rental Car Coverage

This is an optional coverage that will pay a per day amount towards a rental car if you have file a collision or comprehensive claim while your vehicle is being repaired. This coverage is usually capped at a limit and once that limit is up you will be responsible for the cost.

Emergency Road Service

This is an optional coverage that pays towards the cost to have your vehicle towed or other emergency services such as: vehicle lockouts or running out of gas.

If you are not happy with your auto agent and they are not explaining your coverages, then contact local area auto insurance agent to get a quote.

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