Whether you're doubting your insurance policy or simply curious why it's necessary, it's helpful to know what you're paying for.
Types of Car Insurance Coverage in Michigan That Are Mandatory
In Michigan, the mandatory auto insurance coverages comprise what is commonly referred to as "personal liability and property damage" coverage or "PLPD." PLPD insurance provides the minimum insurance coverage required by law and does not include optional coverages such as collision, comprehensive, and/or UM/UIM.
Personal Injury Protection (PIP):
This coverage provides what are commonly known as "No-Fault PIP Benefits." Suppose you're seriously injured in an auto accident. In that case, No-Fault PIP benefits provide reimbursement for medical expenses, a percentage of your lost wages, attendant care (in-home nursing services) and replacement services (help with household duties).
Property Protection Insurance (PPI):
This Michigan car insurance covers damage you cause to parked cars or other property (i.e., buildings, fences, trees, lawns, etc.) within the state of Michigan.
Bodily Injury Liability (BI):
Protects you in the event you cause an auto accident that resulted in severe injuries to someone else. Starting on July 2, 2020, drivers will be required to have minimum BI coverage of $250,000 and $500,000 – unless they specifically choose lower limits of $50,000/$100,000. However, attorneys recommend that you never carry less than $500,000 per person and $1,000,000 per accident to fully protect yourself. The difference is usually only a few dollars more.
Think of this as creating a fence. All of your assets sit behind this fence. The more assets (home, retirement, bank account, collectibles, etc) you have, the bigger the fence you should have.
Property Damage (PD):
This Michigan car insurance coverage protects you in the event you cause damage outside the state of Michigan. For example, if you travel to Ohio, which is a tort state ( A tort state is one in which at-fault drivers in a crash are responsible for paying the other driver's medical expenses, and any damage to their cars) (Michigan is a No-Fault state), and you cause a crash, you would be responsible for all of the other driver's car damage. Your assets are now vunerable if sued.
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