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If you are like many Michigan residents, money is tight and it seems like it’s only getting tighter. As you balance your expenses at the end of the month, your auto insurance bill might stick out as one place to trim costs by eliminated add-on policies. But doing so could leave you in much worse money trouble after an accident. After all, there’s a lot your PIP no-fault insurance doesn’t cover.
Auto insurance is mandatory in Michigan. If you own a vehicle for use on a highway, you are legally required to carry PIP no-fault insurance. But what that means can be unclear.
When you sit down with your insurance agent, or on the company website, there are a lot of optional add-on policies. But do you need them? What do they cover that your PIP no-fault policy doesn’t?
When you are in an accident your car is going to be damaged. Whether it’s just a dented fender or a total wreck, it is going to take money to fix your vehicle. But PIP doesn’t cover property damage to your automobile. For that, you will need collision coverage. Most motorists choose a policy with a high enough cap to replace their car in case it gets totaled. The more expensive your car, the higher your collision coverage premium will be.
If you are in a serious auto accident and become permanently disabled or unable to do your job, your no-fault policy is going to fall short. While your medical expenses are covered for life, wage loss and attendant care services are capped at three years. In these cases, your auto accident attorneys will file a Third Party lawsuit against the at-fault driver to get the money you will need to live with your injuries. You can make sure you are covered in case of a hit-and-run or the driver doesn’t have the money using an under-insured motorist policy.
On the flip side, if you were the one who caused a serious accident, you may be facing a lot more than just your own expenses. If you are the defendant in a Third Party lawsuit, your personal injury protection insurance won’t do much to help. Michigan’s mandatory insurance includes a small liability policy, but many drivers prefer to be cautious. Buying an “umbrella policy” or a liability policy will make sure your bank accounts are safe in case you get sued.
Michigan’s mandatory no-fault insurance is the best in the country. But even this has its limits. By cutting corners, and costs, now you run the risk of carrying the bill after a serious auto accident. Spend time with your bank accounts, and an expert, to decide how much insurance is right for you.