Selecting the right car insurance coverage is important. Using Michigan’s state minimum coverage as the base of your car insurance policy is not the best idea. Michigan’s minimum required coverage is 20,000 bodily injury coverage per person, 40,000 per accident, and 10,000 property damage. If the state says this is all you need to drive legally, why should you purchase higher limits of coverage?
#1 Reason for Selecting Higher Limits of Liability
Not all states have the same car insurance laws as Michigan, actually none of them do. Most people in other states have never heard of standard collision or broad collision. In most states, property damage coverage pays for damages to other people’s vehicles when you are the at-fault driver. When you are in an accident outside of the state of Michigan, that states insurance laws apply.
So imagine you get distracted and cause a serious accident while driving on a long trip outside the state of Michigan. Say you total out a new Ford Focus. Now your car insurance policy is responsible for paying for the total loss of the Ford Focus. Do you think $10,000 will be enough to cover the damages? Probably not. You could be held personally responsible for damages above your listed limits.
#2 Reason for Selecting Higher Limits of Liability
Insurance carriers reward Michigan drivers for carrying higher limits of liability. The most savings is offered to those individuals carrying 100,000/300,000/100,000. What exactly does this mean and why would you be rewarded for carrying higher limits?
$100,000 bodily injury liability coverage per person, $300,000 bodily injury liability coverage per accident, and $100,000 property damage all of which covers the other people in an accident in which you were at-fault. Selecting higher limits of coverage shows you are making a responsible choice in your own protection. 100/300/100 are preferred limits. By carrying the preferred limits, you are a better risk for insurance carriers because you have begun by taking responsibility. In return for making responsible choices, you are rewarded with a discount when you have prior limits of 100/300/100. The discount is offered by most carriers and can be a hefty savings.
#3 Reason for Selecting Higher Limits of Liability
For the liability of course. This is number three because hopefully you will not need to use liability coverage in the state of Michigan. Liability is only paid out for pain and suffering usually caused by complete negligence. With Michigan’s unlimited medical coverage, liability payouts are greatly reduced when compared to other states. Often drinking and driving or falling asleep at the wheel are cause for liability payout. It is comes into play more frequently outside the state boundaries of Michigan.
Higher limits give you a much better chance of having enough coverage to cover the loss of an accident. Heaven forbid you need to use your liability coverage, but if you did, it would be wise to carry 100/300/100 to ensure you have limits high enough to cover the loss. Any loss over your limits could be held against you personally.
The bottom line is that the minimum coverage really is not enough coverage. Even the insurance carriers want to promote higher limits of liability. Select 100/300/100 in order to save money and fully protect yourself.