ADEQUATE INSURANCE COVERAGE

When renewing your automobile insurance policy this year, meet with your agent and make sure that you are protecting yourself and your loved ones in the event of an injury in a motor vehicle accident. Auto insurance policies are complicated contracts, and not knowing what your policy provides in coverage can cause long lasting financial problems.

In Michigan, your insurance carrier is required to provide you personal injury protection coverage (benefits payable no matter who caused the accident) for economic losses when you are injured in a motor vehicle accident. However, if you have health insurance, make sure your insurance agent has carefully analyzed the no-fault coverage that best protects your family. Auto policies can be written for full coverage for accident related medical treatment and wage loss, or to coordinate the coverage with a health insurance and/or a disability insurance plan, at a lesser premium cost.

Before allowing your agent to write coordinated coverage for no-fault, make sure that the trade-off for a lesser premium is right for you. Your health insurance for non-motor vehicle accident health concerns might be compromised, particularly if you have catastrophic accident injury. Also, the paperwork and inconvenience of processing bills through more than one insurance carrier can cause frustration and may risk a lapse in coverage.

By statute, Michigan drivers are also required to carry bodily injury liability coverage for noneconomic losses, such as pain and suffering, caused by their ownership or negligent operation of a motor vehicle. All too often, however, drivers who negligently cause accidents and injury have allowed their policies to lapse and have no liability coverage, or purchased a policy with very low limits of liability coverage. This could mean little or no compensation when you have a serious injury. Uninsured Motorist and Underinsured Motorist coverage are designed to fill the gap when an at-fault driver’s coverage is lacking.

Uninsured Motorist coverage (UM) is designed to provide a source of recovery when a driver without insurance causes harm. With UM coverage, your insurance carrier pays you for the damages you would have recovered, had the other driver been insured. Underinsured Motorist coverage (UIM) goes one step further, allowing a recovery from your insurance carrier when the driver at fault has liability coverage, but the amount is less than you have protected yourself under your policy. It is important to have both these coverages on your automobile insurance policy. The premium dollar is generally low, and is money well spent.

Unfortunately, insurance companies often issue policies with coverage exclusions that take away protection in situations when coverage best protects you and your family members. Talk with your agent to get a full understanding of the exclusions in your policy’s bodily injury liability coverage. Some policies are written to significantly reduce coverage in the event you negligently cause an injury to a family member. Other policy provisions are designed to reduce your protection when you allow a person, who is not identified as a covered person on your policy, drive your car. These types of exclusions are often overlooked, but can significantly reduce your protection.