My name is John Alexander, and I’m a personal injury attorney located in Oakland County, Michigan and serving statewide. Today, I want to talk a little bit about what level of insurance you should retain when driving your car. I have many clients who ask me, well, how much insurance should I have? Or what kind of insurance should I have? And I can give you some general guidelines.
First, with respect to liability insurance, I would maintain at least a half a million to a million dollars of liability insurance. God forbid you get in an accident, you cause someone else some serious injuries, you want the appropriate insurance coverage to help pay for the other person’s pain and suffering, and damages that they may have under Michigan law.
Another option is to get something a little lower but then have an umbrella insurance that is an excess type of insurance; maybe through your homeowners. And it’s really not that much more – maybe 150, $180 dollars to get a million dollar umbrella. This will add an added layer of protection for you.
With respect to your no-fault type of insurance your PIP or personal injury protection aspect of your insurance, there is the term coordinated or uncoordinated that you could choose. For example, when you get insurance, they’re going to ask you, do you want uncoordinated or coordinated? And what that simply means is if you have coordinated, your health insurance carrier becomes the primary payer for your medical expanses with respect to any injuries that you sustain in a motor vehicle accident. And to the extent your auto, your health insurance doesn’t pay, then your auto insurance company will pick up the tab beyond that. Obviously, for having a coordinated policy your insurance company will charge you a reduced or a smaller premium.
However, if you choose uncoordinated, it’ll be a little bit of a higher premium. But you can, what is known in the industry as double dip. If you sustain injuries in a motor vehicle accident, both your auto carrier and your health insurance carrier are primary payers for your medical expenses. But, if your auto then pays the doctors and hospitals then your healthcare insurance company will give you a matching check to you personally for deposit and to use however you want. That’s called in the industry a double dip. some people may want to choose uncoordinated benefits on their policy.
Also I want to talk to you a little bit about uninsured and underinsured motor vehicle insurance. Uninsured motor vehicle insurance typically means if you are hit by a driver that does not have insurance then your insurance company, if you have this coverage called uninsured, they will act as the insurance company of the driver that hit you and you will deal with them in terms of your pain and suffering and your non-economic damages. I would get at least $500,000 in uninsured motorist benefits.
Then there’s something called underinsured motorist benefits. This will come into play if a driver hits you that has a bare minimum policy of 20,000, which is Michigan minimum limits. But God forbid suffer some serious injuries, then the underinsured coverage that you have with your auto insurance carrier will also act as sort of an excess carrier and provide you more insurance coverage that you could use to your benefit. But don’t get minimum or very minimal underinsured benefits because there’s a reduction clause. So, for example if you get a $20,000 underinsured motor’s coverage on your policy and a person that has a 20,000 policy against you, your insurance company will not provide you any benefit because most of these underinsured coverage’s have a reduction clause which reduces the limits by other insurance. So just to do the math if you are hit by a person with a 20,000 liability limits and you have $20,000 underinsured motorist coverage then there’s a $20,000 setup to your limits providing zero benefits. So again, get at least $500,000 in underinsured motorist coverage.