I’d like to explain to you about another important insurance coverage that you can take out to protect yourself and your family. You take out liability insurance to protect the other driver in case you cause an accident, and that’s fine to protect the other driver, but how about yourself and your family? There is a coverage called uninsured motorist/underinsured motorist and we strongly recommend that you take out this coverage.
Many insurance companies will offer you what is called uninsured motorist and have for a long time and what that basically says, for a very small premium, if the wrongdoer has no insurance or if it’s a hit and run, then they will take the place of the wrongdoer and they will settle with you as if they were the wrongdoer in theory, based on your injuries, up to your policy limit. And that’s a great coverage.
So in 1970, there was $20,000 in insurance. You should now carry to protect you and your family normally at least $100,000, and if at all possible, $300,000 in insurance, because with inflation, that’s where it is now for your benefit of your family.
Some insurance companies do not even offer underinsured motorist and this is a critical coverage for everybody in the state of Michigan, and especially for you, because what it says is if you’re rear-ended, somebody runs a red light, somebody is clearly at fault and they come out and say, Gee, we’re terribly sorry we caused all of these serious injuries, but they only have a $20,000 or a $50,000 policy limit, that’s all you can collect, but for a very, very small premium, and it really is a small premium, you can ask your insurance company to write what is called underinsured motorist coverage. That is critical because what that says is if the wrongdoer pays their policy limit and the value of your case is over that auto insurance. So the classic example would be that the person gets out of the car, you’re seriously hurt, their insurance company says, We’re sorry, we only have $50,000 in insurance but your case is worth $300,000, then your own insurance company will give you another $250,000 for your injuries, your pain and suffering, any lost wages over the no-fault coverage, and it is tax free. Please understand, one of the greatest things in our law is the settlement with the wrongdoer is tax free and the proceeds you get from the uninsured/underinsured motorist is also tax free.
It is also important to understand that State Farm Insurance Company, other insurance companies refuse to write underinsured motorist coverage for your protection. AAA writes it. Citizens Insurance Company writes it. Allstate writes it. And if your insurance company does not carry this, you cannot properly protect yourself and your family just like you would take out medical insurance, just like you might take out life insurance and disability insurance, and you seriously should consider changing insurance companies and carry at least $100,000, which would be for one person. Sometimes you write 100,000/300,000. Or like Citizens offers a $300,000 single limit or even a $500,000. Normally whatever you carry in liability coverage in case you cause an accident, you can also carry an uninsured/underinsured motorist and I strongly recommend that you carry this coverage.