What is Liability Insurance in Michigan

A common question that people ask is, what is liability insurance in Michigan specifically? Because Michigan handles it quite a bit differently. Because we have our own medical, called PIT, or personal injury protection, most people already have insurance coverage for that situation. So if you have an accident, it's your fault, and you get injured, it doesn't matter. We're a no-fault state. I go to my medical or my insurance, the other person goes to theirs, and they get their repairs or their injuries taken care of. Now, we call subrogation, which is on the background, where insurance companies will fight it out afterwards, and they'll figure that part out, right? But you don't have to worry about that piece because that's the design of the state. But what place does the bodily injury actually carry? That's the liability portion. So when we say anything that you're liable for, we're essentially saying a claim or something that you were legally responsible. If I went to pick up a pencil that I dropped while driving my car and hit somebody, that's that liability, that responsibility that I have to make that person whole. Imagine you're driving down the road, and you injure somebody, and it's pretty drastic. They have a ton of coverage. Well, the first piece is that medical, which is kind of scary because each person carries their own limits. So if there's somebody that's 65 or older, and they're on Medicare or Medicaid or whatever the case is, and they opt out of the medical themselves, that doesn't negate your liability. That just means that they're covered on their own. But if that's not enough, or they find out that it doesn't cover that, then guess who's on the hook? Unfortunately, you are. That's where that bodily injury kicks in. The other case that you're going to see that come into play is when somebody that isn't from Michigan, for all non-Michigan residents, if you injure one of them, then you're liable for that bodily injury. We'll use my cousin, for example. He visits from Florida, and he got in an accident with his dad's car. Now, the person that hit him luckily didn't have any injuries. Had they had a broken arm, and it was a $5,000 medical, commonly they would have their own liability coverage or uninsured or under-insured coverage that would protect them if that happened. Since he's from Florida, and they technically are a no-fault state, but it's still everybody pays their own liability bodily injury, so in that case, your bodily limits will cover that scenario. That's one of the reasons it's not very expensive, because it's not used that often. So having that higher coverage of liability isn't going to cost you much in the premium, because the odds are if you injure somebody, they're in Michigan as well as you. Get closer to the Indiana border, get closer to kind of going to Wisconsin area, all of those states that outlie us. I don't know why I'm going on the badger. That's out of our state, right? Even if you left our state, your liability carries and your personal protection carries with you in that vehicle, so you have that coverage with you where you go. But if you injure someone that is a non-Michigan resident, then that bodily injury is going to kick in and pay for that. Well, Mark, what happens if that situation mentioned earlier where someone from Michigan was hurt, and there wasn't enough coverage? They have all rights to go after you and go towards your income. They can take your income, technically assets that you have that are above and beyond. I'm not a lawyer, so I'm not going to get into far what they can and can't take there. But in most cases, they can usually get up to 30% of your income. So if you're comfortable that you can either pay that out of pocket, if there was a $100,000 claim beyond your coverage, and they went after you, then you're fine. You've got money in the bank, and you're a happy person, and we need to be best friends. If that's not the case, like most people, then you need that extra coverage, which is called an umbrella policy. To learn more about what an umbrella policy is going to cover, I actually have an umbrella 101 here that goes into depth. It's just a couple minutes long that goes over the pieces of what an umbrella is going to help you with. If you need to learn more about the coverages in Michigan for car insurance, I also have a 101 car insurance for you that will help you go over what coverages you typically would see on a policy and what most people will carry. I'm Mark with Valor Insurance. We'll see you soon.