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Uninsured and Underinsured Motorist Coverage–Protecting Michigan Drivers(2)

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[Note: This was originally posted on March 19, 2009. I am sharing this information again because I have recently seen a number of cases in which the at-fault driver had inadequate or no insurance coverage. Uninsured/Underinsured motorist coverage is an important protection that every driver should purchase.]

Approximately 1.5 million people in the United States drive without car insurance even though some form of insurance is required in every state. Michigan requires every driver to carry No-Fault insurance. If you are caught driving without insurance in Michigan, the penalty can be up to a $500 fine and/or a year in jail. Additionally, your car may be impounded. Still, at least 17% of Michigan drivers are uninsured.

As long as you are insured under Michigan’s No-Fault system, your auto-insurance provider will pay for certain damages regardless of fault if you are injured in a car accident. Basic No-Fault insurance covers your medical expenses, wage loss, replacement services, attendant care, and medical mileage, as well as the damage you do to another person’s property. Under Michigan law if you are seriously injured, you may be entitled to compensation from the person who caused your injuries – the at-fault driver.

Michigan law requires a bare minimum amount of liability insurance a person needs to purchase, currently it is $20,000 per person/$40,000 per accident. 20/40 insurance covers up to $20,000 for a person who is hurt or killed in an accident and up to $40,000 for each accident if several people are injured. Needless to say, if you or a loved one suffers from death, disfigurement, or serious bodily harm, finding out that the at-fault driver doesn’t have insurance or has purchased the bare minimum of 20/40 insurance can be an additional harm related to the accident.

That is why purchasing uninsured and underinsured motorist benefits from your own insurance company is so important. In the event you are severely injured and the at-fault driver doesn’t have insurance or only has the minimum levels of liability coverage, you won’t be left out in the cold. Your own insurance company will pay the difference of what the at-fault driver’s limits wouldn’t cover. Therefore, it’s always best to get the highest levels of underinsured and uninsured motorist coverage you can afford.

Keep in mind that your own insurance company can set off the payments made by the at-fault driver. When considering uninsured or underinsured motorist benefits, purchase more than 20/40 coverage, otherwise the added plan could be rendered useless if the at-fault driver has 20/40 insurance.