The Most Common Types of Insurance Coverage

common-auto-insurance-coverageIt’s important that you have an auto insurance policy that will cover you adequately if you happen to get involved in a car accident.  All of the tv commercials and other forms of advertising for insurance companies make it seem that cheaper insurance is better, but you usually get what you pay for.  There are many options available to you that you should be talking over with a local insurance agent.  You need to know exactly what is covered in your policy and what is not covered in your policy.  Many drivers in Michigan are uninformed about their insurance options simply because their provider has never taken the time to explain how their policies work.  Michigan has complex statutes regarding insurance and it’s especially important to fully understand the different types of insurance coverage.

No Fault Insurance

fault-insuranceMichigan law requires that all drivers carry no-fault auto insurance.  You will be facing penalties and fines if you are a Michigan resident and drive without insurance.  Under no-fault insurance, you will be compensated for medical expenses by your own insurance irrespective of who is to blame for the accident.   No-fault insurance also pays for up to 85% of lost income as a result of the injuries sustained and care costs.   It will also cover all other first party benefits which include medical expenses, medical mileage, replacement service, attendant care, home modifications, and vehicle modifications. No-fault insurance will also cover the victim’s losses up to a certain amount if you’re found to be at blame for the individual’s injuries or death. This, of course, depends on the type of policy purchase.

Collision Coverage

collision-coverageCollision coverage will cater to the repairs of your car following a crash. In case your car is totaled (meaning that the cost of repair surpasses the value of the car), collision coverage will pay for the value of your vehicle at the time of the accident. Note that if your vehicle is old, it may not qualify for collision coverage depending on the value.  Michigan no-fault insurance does not cover repairs to your automobile, so it is advisable if you have a new car or a car with a high market value that you also purchase collision coverage.  There are also various levels of collision coverage that you will have to decide on.  Many Michigan residents don’t realize that they need to purchase additional insurance and are caught off-guard when they are involved in an accident.  In many cases, the financial institution that provided the loan will require some form of collision coverage.

Uninsured Motorist Coverage and Underinsured Motorist Coverage

Michigan law states that all drivers must have no-fault insurance, but this law is broken all the time and drivers fail to purchase and maintain a vehicle insurance policy.  Many others only purchase the bare minimum insurance that is required by law.  Car accidents and the resulting injuries require large medical treatment and a large financial cost.  If the other driver in the accident has no insurance in or just the bare minimum insurance, chances are that the expenses will outweigh the insurance coverage.  For this reason, you can purchase uninsured or under-insured motorist coverage to help protect you against inadequately insured drivers.

When involved in an accident, pursuing compensation can be a complicated affair. Despite being covered, insurance policies have exclusions and exemptions that you must understand fully before filing a claim. As such, contacting a car accident lawyer will help you know what your options are after an accident. Also, be sure to get in touch with a car accident attorney before purchasing any insurance so that you can have a better explanation of what to expect with each type. That way, you can make an informed decision when buying the insurance policy right from the start.

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