Do You Have Appropriate Motor Vehicle Coverage?

Since 1972 Michigan has operated under a no-fault law for accidents that occur involving the use, operation, or maintenance of a motor vehicle. This article explains the no-fault law, along with some tips to ensure you have appropriate motor vehicle coverage.

When you purchase automobile insurance you obtain certain minimum, standard coverages. If you do not buy motor vehicle insurance for a vehicle you own and are injured while driving that vehicle, you do not have any rights to no-fault benefits or rights against a negligent driver. Automobile insurance is mandatory.

 No-fault benefits cover three main areas of economic loss:

  • Medical expense that are reasonable, related to the accident and necessary for your care, and rehabilitation treatment for the rest of your life;
  • A certain percentage of your wage loss for three years to a maximum dollar amount; and
  • Household services for things you used to do around the home, but no longer can due to the accident. Household services are limited to $20/per day for a maximum of three years.

If another driver is negligent and you sustain injury as a result of that negligence, you may have other rights against that driver for your pain and suffering and other non-economic losses if you injury is serious enough. In the event of a death, there may also be survivors’ benefits.

Keep reading for an explanation of three important motor vehicle coverages.

Liability Protection
Liability protection is the amount you are insured in the event you get sued for causing injury to another person. The minimum coverage automatically included in your policy is referred to as a 20/40 policy, meaning insurance coverage is for $20,000 per injured person and $40,000 per accident total. This amount is certainly not sufficient should you become liable to someone who has sustained lifelong injuries or is disabled for more than three years. Coverage can be increased from 20/40 to 100/300 ($100,000 per injured person and $300,000 per accident total) with very little adjustment to your premium.

If you do not have the following two coverages, you are strongly encouraged to get them. If your insurance company does not offer these coverages, switch companies. They are that important.

Uninsured Motorist Coverage
The first type of coverage is uninsured motorist (UM) coverage. If you get struck by an uninsured motorist, you might not be able to recover any money for your injurgies from the uninsured motorist, even if they are entirely at fault. UM coverage would step in to cover your pain and suffering and non-economic loss to the extent of the policy limits. Keep in mind you can only get UM coverage to the extent of your liability coverage. This is another reason why increasing from a 20/40 policy is important.

Underinsured Motorist Coverage
Underinsured motorist coverage is a valuable coverage that is crucial for your protection. If a driver is negligent and causes you, or someone in your car, serious injury, your underinsured motorist coverage steps in to make up the difference between what is available on the negligent driver’s policy and the amount of your coverage. For example, it you have $100,000 underinsured motorist coverage and are seriously injured by a negligent driver who has a 20/40 minimum, once the negligent driver’s insurance company pays you the $20,000, you now have under your own policy, an additional $80,000 of coverage.

There are some steps you must go through to be eligible for payment under the underinsured coverage, so be careful and consult an attorney if you think this will be an issue. Underinsured motorist coverage is often written into the policy as part of the uninsured protection.

The minimal cost to obtain additional liability protection, uninsured, and underinsured motorist coverage can be the most valuable investment when you are insuring your vehicles.

Robert L. Blamer is a partner in our Livonia office and head of the Firm’s plaintiff’s practice group. He focuses his practice on helping injured people in many types of negligence actions, workers’ compensation claims, and Social Security disability claims. He may be reached at (734) 261-2400 or rblamer@cmda-law.com.