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Automobile Insurance Coverage

   

Automobile insurance laws in Michigan require the owner of a vehicle to have a certain amount of liability insurance on the vehicle. M.C.L. § 500.3009. Liability insurance provides compensation to another person in the event that you cause an accident and are found to be liable to that person for damages. Michigan law requires a minimum of $20,000 in insurance coverage for bodily injury to or death of one person in a single accident, and a minimum of $40,000.00 in coverage for bodily injury to or death of two or more persons in a single accident. M.C.L. § 500.3009 (1). Purchasing liability insurance in excess of the statutory minimum offers an insured greater protection in the event they face paying damages that exceed the minimum coverage amount.  

When Buchanan & Buchanan, P.L.C. represents a person who is injured in an accident, one of the first things we do is investigate all applicable insurance coverage. There are two categories of auto insurance - first party coverage and third party coverage. First party coverage covers you and your property against costs arising from such things as medical treatment, damage to your vehicle, and legal representation in the event that you are sued. Third party coverage insures against liability arising from your actions in causing injury to others. The coverage and its exclusions are set forth in the insurance policy. In exchange for the payment of a premium, the insurance company promises to provide compensation in the event of certain occurrences. Though a full recitation of the coverage available and the applicable insurance law would require several large text volumes, the following is brief synopsis of the most common types of coverage and the Michigan laws that dictate that coverage. 

Liability Insurance

As stated, liability insurance is required by law. M.C.L. § 500.3009. The liability insurance policy provides for the insured's defense and settlement of automobile negligence claims brought against the insured.  The policy will also dictate the payment of judgments relating to automobile negligence that are rendered against the insured. If you are injured by the negligence of another driver, we will make a claim under the bodily injury liability coverage of the negligent driver's insurance policy. Liability coverage is not health insurance, and it is not designed to pay for your medical bills as they are incurred. It is designed for a one time settlement or payment for all of your damages. Liability insurance minimums required by law in Michigan are:

No-Fault Insurance Coverage

Michigan insurance law provides for "no-fault" automobile insurance. MCL 500.3105. In no-fault insurance, the cost of your medical expenses, lost wages (ordinarily awarded in the amount of a percentage of your pre-accident gross wages), and post-accident rehabilitation will ordinarily be paid by your own no-fault policy, or that of the owner of the car in which you were riding. In order for an injured party to recover any excess damages, such as lost wages above what the no-fault policy pays, it may be necessary to bring suit against the other driver who caused the accident.

If you choose not to elect comprehensive and collision insurance, your ability to recover for vehicle damage from the other driver will be limited to $500. MCL 500.3135(3)(e). You may also be able to recover from the other driver if your your car was legally parked at the time it was damaged (assuming you can identify the responsible party). 

Medical Payments (Med-Pay) Coverage

When purchasing automobile insurance for yourself, you may seek to include several additional type of coverage other than liability insurance. One of these types of coverage is called medical payments coverage, which is not required by Michigan law. M.C.L. § 500.3009. 

Medical payments coverage is a form of health coverage called by various terms, including "med-pay","personal injury protection (PIP)", or on occasion "economic loss protection benefits". This coverage is available to the insured driver (the individual who holds the policy which includes med-pay coverage) and any passengers in the insured's vehicle for injuries sustained, regardless of the fault of the driver. It is important to note that the insurance policy of the negligent party does not pay med- pay or PIP benefits to an injured plaintiff. These benefits are limited to the driver or passengers in the insured vehicle, regardless of fault. The plaintiff looks to his own insurance policy or the policy on the vehicle in which he was a passenger for med- pay or PIP benefits.

The amount of med-pay benefits which may be paid to any individual is determined by reference to the policy limit for this particular type of coverage, as stated in the insurance policy declarations sheet for the person who purchased the coverage.

Uninsured and Underinsured Motorist Benefits:

Two other related types of voluntary coverage you can (and should) purchase are uninsured and underinsured motorist benefits. These types of coverage protects you against a negligent defendant who illegally does not have liability insurance coverage or has minimum coverage that is inadequate to fully compensate you for your injuries. If you are involved in an accident with an uninsured but negligent individual, we would make a claim for you under your own uninsured motorist coverage. Your own insurance carrier would then have to pay any judgment which may be rendered, up to the limits of the policy which you purchased.

If the person who caused the accident has liability insurance, but the policy limit of his or her liability insurance is less than the uninsured motorist coverage of your policy, we can make an additional claim under your own policy for what is called underinsured motorist benefits, in the event that your damages exceed the limits of the other party's liability coverage. A complicated body of case law has evolved dealing with this type of benefit, and the experience of an attorney familiar with these issues is important in order to obtain the maximum amount of recovery for you.

Collision Coverage:

Collision coverage is a type of voluntary coverage you can purchase which provides for the repair or replacement of your own vehicle after an accident, regardless of whether or not you are at fault. This is different than property liability insurance coverage discussed above. An innocent victim of an accident may present a claim for the property damage under his or her own collision coverage or under the negligent defendant's property damage liability insurance coverage. Your own collision coverage normally includes a deductible, whereas property damage liability insurance coverage does not. In an automobile accident case, after a claim has been paid under collision coverage, the insurance carrier who paid the claim may proceed against the property damage liability insurance carrier for the negligent defendant to recover the amount paid out. This process is called subrogation, and does not affect your recovery.

In all automobile accident cases it is essential that measures be taken promptly to preserve evidence, investigate the accident in question, and to enable physicians or other expert witnesses to thoroughly evaluate any injuries. If you or a loved one is a victim of an automobile accident, call Buchanan & Buchanan, P.L.C. now at (800)272-4080 or CLICK HERE TO SUBMIT A SIMPLE CASE FORM. The initial consultation is free of charge, and if we agree to accept your case, we will work on a contingent fee basis, which means we get paid for our services only if there is a monetary award or recovery of funds. Don't delay! You may have a valid claim and be entitled to compensation for your injuries, but a lawsuit must be filed before the statute of limitations expires.

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The above is not legal advice. That can only come from a qualified attorney who is familiar with all the facts and circumstances of a particular, specific case and the relevant law. See Terms of Use.