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Use Your “Stay Home, Stay Safe” Time to Understand Your Auto Insurance Coverage

April 30, 2020

Many Michiganders are trying to productively occupy their time while staying safe in their homes.

A good way to spend some of that time would be to sit down with your auto insurance policy and make sure you understand your coverage, especially underinsured/uninsured motorist benefits. As you’ll see below, adequate coverage can be essential if tragedy strikes your family.

What Policy Limits Must Drivers Have in Michigan?

Michigan requires no-fault auto insurance coverage that includes three basic parts for every vehicle: Property Protection Insurance (PPI), Personal Injury Protection (PIP), and Residual Bodily Injury and Property Damage Liability (BI/PD).

Personal Injury Protection (PIP). PIP will pay for all reasonable and necessary medical expenses for life if you’re hurt in an auto accident, along with wage loss and replacement services for up to three years from the date of the accident. However, on July 2, 2020, many changes will occur in Michigan’s no-fault insurance law, including giving Michigan drivers a choice in their level of PIP coverage. In the new plan, unlimited medical expense coverage for life will not be automatic, it will be one of six options drivers can choose.  It is important to discuss this change with your insurer to make sure you are properly covered when the change occurs July 2.

Property Protection (PPI). PPI will pay up to $1 million for any damage that’s done by your vehicle in Michigan to the property of others. This can include damage done by your vehicle to garages, storage sheds, fences, as well as other people’s properly parked vehicles.

Residual Bodily Injury and Property Damage Liability (BI/PD). BI/PD pays—up to the limits of your auto policy—your defense costs and any damages for which you’re found liable because of an auto accident where another person is killed or seriously injured. You’re able to purchase higher limits of BI/PD coverage, but the minimum limits of coverage that everyone must have are:

  • $20,000 per person who is hurt or killed in an accident;
  • $40,000 for each accident if several people are hurt or killed; and
  • Up to $10,000 for damage your vehicle does to property in another state.

These minimum limits are often called “20/40/10.”

Why is it so Important to Have Underinsured or Uninsured Motorist Policy on Your Auto Insurance Policy?

Michigan law requires drivers to buy no-fault auto insurance. If you or your family are injured in an auto accident, your auto insurance will pay all reasonably necessary expenses with no maximum limit, along with lost wages and replacement service benefits for a brief period of time. Remember, this will become a choice on July 2.

In a serious car accident, injuries can run into the hundreds of thousands of dollars, and few people have the financial wherewithal to satisfy that type of claim. And as the real life story illustrates below, the financial security of having adequate auto insurance is one of the primary reasons to have insurance.

Uninsured and underinsured coverages will pay if an uninsured or underinsured motorist seriously injures you or a member of your family. That is someone who carries the basic minimum limits described above of 20/40/10. If you’re awarded a settlement from the at-fault driver, and they don’t have sufficient liability coverage, your own uninsured or underinsured coverage will apply. That’s what happened to a family in 2018.

A Real Life Story: See Why Uninsured and Underinsured Insurance is Important

On September 23, 2018, a 60-year-old man was driving a Peterbilt semi truck for his work south on Maple Island Road. A 2010 Honda CRV driven by a young man was approaching Maple Island Road on 80th Street in Newaygo County.

The driver of the Honda CRV, who was under the influence of drugs, blew through the stop sign at the intersection and slammed into the Peterbilt truck, causing it to overturn. The man in the truck died of severe trauma at the scene of the accident.

The at-fault driver had only $20,000 of insurance, and his insurer offered to pay the truck driver’s widow the policy limits—Michigan’s minimum limits of “20/40/10.” However, the truck driver had two insurance policies covering him with underinsured motorist coverage: a commercial auto policy he purchased with $1,000,000 of underinsured motorist (UIM) coverage; and a commercial auto policy his employer had that provided him with $500,000 of underinsured motorist coverage.

With the help of Michigan auto accident attorney Robert Buchanan, the truck driver’s widow was able to collect underinsured motorist (UIM) coverage from the insurers. Without these two policies, the widow would have been left with no husband, mountains of bills, and a mere $20,000 from the at-fault driver’s policy. The truck driver’s smart planning to buy underinsured motorist (UIM) policies provided his wife and family with a secure financial future.


As this real life story shows, there are reckless drivers on the public roads in Michigan with almost no auto insurance. Some blow through stop signs. Some run red lights. Some change lanes without looking. Some are distracted by their cell phones, and others are driving under the influence of drugs or alcohol. Drivers can be reckless and negligent in a host of ways. You must have adequate uninsured and underinsured motorist coverage to provide for you and your family. If you have additional questions, reach out to a Michigan car accident lawyer.