Auto Insurance Laws
Michigan is one of the most consumer friendly states in the country as far as consumer protection laws go. The state first established what they call the "no-fault" law back in 1973. You are required to have coverage if you drive an automobile in Michigan. While rising premiums may make you grimace at the cost of insurance it is important to note that because Michigan requires car insurance coverage you are protected if somebody causes injury to you and your passengers as well as to your vehicle. This is a nice alternative to have rather than going through your own insurance policy and paying the likely increase when your auto insurance policy renews
Required Insurance Coverage
In every state there are liability insurance minimums you must carry if you have an insurance policy. They are usually broken down as a 3 tiered figure like 20/40/10. Well, what does that mean?
- The first number is bodily injury per person in the vehicle
- The second number is the maximum amount paid for bodily injury in total
- The third number is the amount available for property damage
- Michigan's auto insurance laws state the minimum required liability coverage is 20/40/10
Let's discuss an example. John hits Mary's vehicle. Mary is injured. Liability insurance covers only damage, property or bodily injury, that you are legally responsible for. So in this case John's liability insurance would be responsible. John has the state minimum limits. So there is $20,000 available to Mary for bodily injury (that's the first number), only $20,000 of the second number ($40,000) available because that second number is what is available total but that first number ($20,000) is the maximum available per person in the vehicle, and $10,000 (the third number) for damage to her property such as her car if she doesn't have her own collision coverage, items in her vehicle (GPS, groceries, personal items).
We hope that gives you a solid understanding of why the auto insurance laws are they way they are in Michigan and how they protect you. For more in-depth information we invite you to check on the State of Michigan's website at www.michigan.gov/dleg. Make sure to bookmark our site as we will continue to add articles, tips, and information frequently.
