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The insurance coverage that an insurance lawyer recommends

August 24, 2011 by Steven M. Gursten

A review of uninsured/underinsured motorist coverage and collision insurance that can further protect you and your family if a car accident occurs

This week, we began a three-week-long giveaway sweepstakes to bring awareness to the dangers of texting while driving in Michigan – as well as the importance of buying the right auto insurance. If you visit our Facebook page, you can enter to win $1,032. The only requirement is to watch a 30 second video on distracted driving and filling out the entry form.

Why a $1,032 check? The Insurance Institute of Michigan’s December 2010 data states that the average auto insurance premium in Michigan is $1,032.02.

The winner can use the money however he or she wants. But as an insurance laywer, I hope the winner will use it to buy the right kind of auto insurance this year. Our campaign isn’t just about distracted driving. It’s also to get the word out on just how many people are uninsured on our roads today and how critical auto insurance with Uninsured motorist coverage (UM) is to properly protect yourself.

As I blogged about before, about 50 percent of Detroit drivers are driving without any auto insurance, as reported in the Detroit Legal News. And in Michigan, about 19 percent of drivers have no auto insurance, according to a news release by the Insurance Research Council.

With that, I’d like to summarize additional coverages you can buy along with your mandatory Michigan No-Fault insurance. These insurance coverages provide more protection in case of a serious car accident – especially if that accident is with someone who doesn’t have No-Fault insurance.

Uninsured/underinsured motorist coverage

Uninsured and underinsured motorist coverage (UM/UIM) provides a valuable source of legal recovery after a car accident, when someone is injured by another driver who is uninsured or does not have adequate insurance.

Many auto insurance companies don’t inform their policy holders of these important options.

With UM and UIM, an injured person turns to his or her own auto insurance company to pay what would have been recovered from the at-fault driver, had that person been properly covered.

This coverage is very inexpensive. As I always say, for the price of a movie and popcorn, you can make sure your family is covered in case of a crash with an uninsured driver.

Collision insurance and comprehensive insurance

Remember, in most cases, your No-Fault insurance does not pay for repairs to your car if it is damaged in an accident. But collision coverage pays for repairs to your car when it is damaged in a crash.

There are three basic kinds of collision to choose from – limited, standard and broad form. These have varying deductibles (A deductible is the amount of money you agree to pay toward the cost of repairs before the insurance company steps in and pays the remainder).

Comprehensive insurance pays for your car if it is stolen or for repairs if your car is hit by a falling object, collides with an animal or is damaged in a fire, flood or by vandals’. Think of the insurance commercials that show objects falling onto cars with a comedic spin.

Residual liability insurance – increased limits

You may be sued because of an accident. If this happens, your No-fault policy will pay up to the amounts shown in the residual liability section.

But courts sometimes award more than these amounts. If this happens, you would be responsible for paying the amount not covered by your insurance policy. Many people buy higher limits if liability insurance to protect themselves.

Limited property damage liability insurance – mini tort

The No-Fault law protects insured people from being sued as a result of an auto accident, except for special circumstances. For car damage, a person can only be sued for up to $500 – if you are 50 percent or more at fault in an accident which causes damage to another person’s car. This is called the Michigan mini tort law.

But most companies offer limited property damage liability insurance to cover this $500 liability.

More helpful tips for buying auto insurance in Michigan

If you’re looking to buy insurance, take a look at our list of the top 4 Michigan auto insurance companies and tips for buying the right auto insurance.

We also have a book called What Auto Insurance Is Right For Me? It has the 8 essential questions you must ask your insurance agent before buying No-Fault insurance.

We hope all of these insurance tips help. Again, sign up for our distracted driving sweepstakes on Facebook! You could win a $1,032 check, and we really hope the winner will use the money for a year’s worth of auto insurance.

Steven Gursten is recognized as one of the nation’s top insurance lawyers handling serious auto accident cases and No-Fault insurance litigation. He writes about the importance of Michigan’s No-Fault law, and is available for comment.

Related information:

3 potential cases after an auto accident

Guide to Michigan No-Fault law

Michigan’s 6 worst auto insurance companies

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you. Call (248) 353-7575 for a free consultation with one of our No-Fault insurance lawyers.

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