One of the most important insurance decisions you can make is to protect your personal automobile and recreational vehicles this includes joy riders like – trailers, jet skis, ATV’s, snow mobiles, … I think you get the idea. 

Auto insurance is more than being legal in Michigan

It is important mainly because it protects the people riding them, as well as, for secondary reasons like – keeping you legal in certain states, helping you pay for repairs to the auto, damages to individuals, and sometimes even full replacement of the vehicle.

If an accident happens, and sadly — even when you are extremely careful they still do happen — you need an insurance company you can trust, and one that is a best fit for your needs.

Choosing the right insurance agency & auto insurance provider(s)

With more than 30 years as an insurance brokerage agency here in Southwestern Michigan, we at Mahar Insurance have seen many situations where auto owners have multiple properties with multiple vehicles cross the state lines of Michigan, Indiana, and Illnois and the same cut-rate insurance is supposedly covering everything with equal protection.

The reality is the one types of insurance might be best for one type of vehicle in one state, and not the best option for other type vehicle in another.

For example, if you own a “Classic Car” in Michigan, American Modern Insurance is by far your best option, but, they would not offer ideal insurance to cover your Mercedes C300 sedan in Indiana, as well.

Would you know why? It all comes down to coverages within your auto insurance policy. And, the only way to know your coverages is to understand auto insurance terminology and the governing rules of each auto insurance company you are considering as your local Michigan auto insurance partner.

Auto insurance terms you need to understand auto coverages in Michigan

In most states, liability coverage is mandatory, Michigan is one of them.

Michigan requires you to have no-fault car insurance, which covers injuries and damages caused in a car accident regardless of who is at fault. Michigan’s basic no-fault auto insurance includes:

  • Personal injury protection.
  • Property protection.
  • Residual bodily injury/property damage liability insurance.

Auto Insurance Term #1: Personal Injury Protection (PIP)

Personal Injury Protection covers your medical bills and often lost wages. PIP usually also covers the cost of personal services you most pay someone to do for you as a result of a car accident. 

For example, a tow truck might be needed if the accident is so bad you can no longer operator your vehicle.

In Michigan, you are given the option of coordinating your health insurance with your PIP coverage. If you do so, your health insurance will pay for your medical bills up to the limits of your health insurance policy first. Your personal injury protection insurance will cover the rest.

Auto Insurance Term #2: Property Protection (PPI)

This coverage will pay up to $1 million for damages to other people’s property such as buildings. PIP will also cover damages to someone’s car if that car was legally parked, but will not cover a moving car that was involved in the accident.

Auto Insurance Term #3: Bodily Injury/Property Damage Liability (BI/PD)

The purpose of mandating no-fault insurance in Michigan is meant to protect you from being sued after an accident unless:

  • You cause a car accident in which someone was seriously injured or killed.
  • You are involved in an accident with someone who is not a resident of Michigan and is not driving a Michigan registered car.
  • You are a Michigan driver involved in a car accident in another state.
  • You are 50% or more at fault in an accident that causes uninsured damages to another car. You may only be sued up to $1,000 in this instance.

If you are sued after one of the above instances, Residual Bodily Injury/Property Damage Liability (BI/PD) insurance covers your legal liability, up to the limits you select, for damages caused in a covered vehicle accidents.

According to the Michigan Department of Motor Vehicles, the minimum amounts of BI/PD insurance you must carry in Michigan are:

  • $20,000 for injuries or death to an individual.
  • $40,000 for injures or death per accident to multiple people.
  • $10,000 for property damage in another state.

More about BI/PD:

If it is determined that your insurance needs to cover the cost of an accident for which you are sued, most insurance companies will also pay for the lawyer who defended you in Michigan courts.

While the first 3 auto insurance terms mentioned so far are required in Michigan, the next 6 insurance coverages are optional in Michigan.

It is important to note, however, if your car is leased or financed, you might be required to buy certain coverage limits in Michigan, as well.

In fact, some car brand companies, like Toyota, even offer extended insurance services for drivers leasing a vehicle.

Auto Insurance Term#4 Collision Insurance

This optional auto insurance add-on in Michigan pays for damages if your vehicle overturns, or if it collides with another vehicle or object.

Collision coverage is subject to a deductible amount that you choose. The most frequently selected amount in Michigan is $500.

Mahar Insurance allows recommends you select a deductible amount that you feel you can comfortably afford — if there is a collision claim on your policy, this will be the amount you will generally be required to pay.

Auto Insurance Term #5 Comprehensive Insurance Coverage

This pays for damage caused by an event other than a car collision, such as fire, theft, vandalism, or “acts of God“. In additional, it covers damage from hitting an animal and the cost of a rental if your car is stolen. Comprehensive insurance coverage is optional.

Note: Comprehensive insurance is likewise subject to a deductible, which is most commonly the same as Collision … $500.

Auto Insurance Term #6 Medical Payments

Just as its name sounds, Medical Payments coverage applies no matter who is at fault and covers the cost of reasonable and necessary medical care provided to you as a result of a car accident.

Auto Insurance Term #7 Uninsured/Underinsured Motorist

When you are legally entitled to pay for damages to recover for your bodily injury this coverage comes to the rescue. Uninsured/Underinsured Motorist coverage generally provideswhat you would have received from the other person’s insurance company if that person had insurance.

62% of Michigan drivers are only insured enough to meet minimum legal standards. This coverage typically comes in handy as a protection if the person you caused the damage does not have enough insurance.

Auto Insurance Term #8 Rental Reimbursement

This coverage can only be purchased along with Collison and Comprehensive.

If you buy Rental Reimbursement Insurance coverage, your Michigan auto insurance provider will reimburse you for rental car charges incurred while your vehicle is being repair at a local auto repair shop after a covered accident.

Mahar Insurance recommends you allow take your vehicle to an auto repair shop approved by your Michigan vehicle insurance company.

Auto Insurance Term #9 Roadside Assistance

Many times if you lease or finance a vehicle your many company like Ford will help you “Go Further” with their own Roadside Assistance programs.

For other types of vehicle ownership, this coverage will cover the cost of labor incurred at the place where your automobile becomes disabled as a result of a mechanical / electrical breakdown, dead battery, flat tire, and/or lock-out.

Some insurance companies, like Progressive Insurance will help you if you run out of gas, run low on some type of engine fuel, or become stuck in some of the famous deep Michigan snow / mud within 100 feet of a road.

If necessary, Roadside Assistance will cover towing to the nearest qualified repair facility.

Confused about auto insurance coverages yet?

We hope this helped clarify things a bit, but, the reality is this are just the basic auto insurance terms.

If you are confused a bit, please don’t feel bad. We have been at this for 3 decades, and every once in a way there is a tricky situation — that even challenges the best auto insurance agents.

One thing, we really hope you realize is that no single auto insurance company can mean the demands and needs of every Michigan resident driver.

In fact, this is the chief reason why Mahar Insurance offers several different auto insurance brands to its clients, [ mainly in Southwestern Michigan ].

The auto insurance companies we work with most frequently in Michigan are:

  • American Modern Insurance – If you live in Dowagiac, Michigan or the surround Southwestern, Michigan area you have mostly likely heard about the Rod & Roll Classic Auto Show of the Chamber of Commerce. Mahar Insurance typically offer American Modern insurance when a vintage / collector car needs insurance.

We particularly like working with America Modern Insurance because they offer Michigan car collector’s an agreed value total loss settlement.

Before the policy activates, you as the classic car’s owner, their underwriters, and the Mahar Insurance team agree on the car’s value and insure it for that amount.

In the event of a total loss, that agreed upon value is the payout amount. The deductible of course applies, but there is no depreciation and no misunderstanding.

  • Foremost Insurance – We like working with this company for auto insurance in Michigan because they accept a broad range of drivers and driving histories.

Best of all, as one of Foremost Insurance’s top Michigan auto insurance agents / insurance brokers,  we can help you choose the right Foremost policy for your auto, so you can go out and enjoy the drive while Mahar Insurance takes care of the paperwork!

There’s also a noticeable “FLO” in how you shop for, buy and own an auto insurance policy.

We recommend you leverage the relationship, Mahar Insurance has as a Progressive Insurance agent / insurance brokerage agency to experience the difference immediately—and continue to, the longer you’re working with us.

We are a Safeco Premier Partner agency, meaning we have a track record of success with SafecoInsurance and exhibit an exceptional level of commitment to all our customers. To learn more about Safeco Insurance contact us.

4 Ways to reduce the cost of your Michigan auto insurance.

Yes, protecting the ones you love, and being a legal driver in Michigan can be expensive. Fortunately, they are things you can do to minimize the costs. Here’s a few:

  • Some vehicle insurance programs offer “Good Driver” discounts in which the better your driving record over time, your rate drops due to you being considered less of a risk behind the wheel.

  • Many insurance companies will offer additional discounts to Michigan auto owners who complete this course from an approved Michigan driving education instructor/ driver training sponsor. Here’s the official Department of State list >>>

  • The most common discount is the multiline insurance . Typically if you do not own property, and vehicle in more than one state, multiline insurance is highly recommended. Basically, if you select to insure your house, vehicles, and/or other types of insurance like health, life, umbrella, etc. with the same insurance brand your get an overall discount. We will discuss when multiline insurance can go wrong shortly.

Well that is all for today. We hope you found this lengthy, yet important article informative and helpful. Should you have any question related to auto insurance terms, vehicle insurance policies, or simply would like a FREE review of your current policy to insure it is best for you, please connect with us.