Car, Home, Toys, and Life Insurance Resource Center

Welcome to the best Michigan insurance resource! Michigan has the most unique insurance laws in the United States. Learn about what it takes to be insured properly as a Michigander. Get saving tips, mandatory coverage amounts, and answers to many frequently asked questions.

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Nov 14

What Happens If I Pay My Car Insurance Late?

It happens to everyone. Sometimes you just don’t have the funds you need when you need them. Other times you simply forget and the date slips by you. Whatever the reason, you may find out you paid your insurance bill late. Now is not the time to freak out depending on how late it is. If you don’t know what happens when you pay your car insurance late in Michigan then, you will find this helpful.

First, look at how late you are. Is it a day behind, a month, more or less? This is important to determine how late it will actually be. Did you already mail the check off, or did it just enter into your mind to do so? This is another determining factor in what happens.

Things You Should Expect

  • Late Fees
  • A Double Payment (the past due amount plus the current month’s payment)
  • No Reinstatement if it is a Second Offense

The unfortunate truth is that some insurance companies will temporarily suspend your insurance even if you are just a day or two late in paying. In insurance lingo, this is known as a lapse in your insurance policy. A lapse in your policy means that you are not insured and considered to be an illegal driver because of it.

Fortunately, most insurance companies are going to send you a notice that you are at risk of having your insurance policy lapse if they do not receive a payment within a certain amount of time. This could be a few hours or a few days. Your insurance company may opt for giving you a phone call in addition to written notification. If you do not contact your insurance company to work something out, or pay them, you should consider yourself as an uninsured driver. To make things even worse, some insurance companies will charge you a late fee per day until you make your insurance payment.

What Happens When it Lapses

After your insurance company lapses your insurance coverage, the last thing you want to do is be caught driving without insurance. If you get pulled over or you get in an accident, you could lose both your license and the registration of your vehicle. Then, you have to pay a reinstatement fee to get your license back and you have to pay to register your vehicle again. If you are alone in the vehicle, you could also end up having to pay an impound fee to get your vehicle back.

In some cases, you may even be facing jail time for getting in a car accident while you were unlicensed or uninsured. Whether or not this happens, depends on if you have previously driven without insurance before.

What Should You Do?

You have to keep in mind that insurance companies are not like the monster that lived under your bed when you were a child. They understand the hiccups in finances and unexpected expenses happen from time to time. In a lot of situations, an insurance company is more than willing to work out some kind of plan with you. Don’t push their willingness to help. Being late every month is not acceptable and will most likely result in your policy being cancelled.

The worst thing you can do in this situation is doing nothing. Call your insurance agent and let them know you are struggling to find the money to make your payment in time. Just tell them what’s going on and see if some kind of long term payment plan can be worked out. You can also ask if you can have a few days or an extra week to make a payment without having to worry about your insurance lapsing.

Your insurance provider has no way of knowing that you are struggling to find the money if you don’t tell them. Not telling them anything at all is when they just assume you are not going to pay them at all. Losing your status as an insured driver will make you a high risk driver. In Michigan that means when you do get your finances straightened out, you will be paying a much higher insurance rate for a full six months to get back to a preferred rate.

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Sep 14

Caught Driving Without Car Insurance in Michigan

Everyone grumbles about having to pay that monthly payment for auto insurance, but you certainly do not want to be caught driving without it. It can mean big fines, license suspensions and even jail time. That is not to mention the huge financial risk you are taking in driving without protection in case of an accident.

Penalties for No Car Insurance In Michigan

Simply running up to the local convenience store could still mean an unintended accident with serious property damage, personal injury or even death. This is why they are called accidents. They are rarely planned. Can your estate withstand a serious lawsuit from injuries, damages or the death of another driver or passenger? Better not take the risk.

No-Fault Coverage

In the state of Michigan you are required to have and maintain a no-fault insurance policy. It covers any damages and injuries caused by a car accident no matter who is at fault. It has to include coverage for personal injury protection (PIP), property protection and residual bodily and property injury.

The PIP will cover your medical expenses from any accident you are involved in. You can attach your personal health insurance to the PIP so that it pays up to the maximum policy amount and then your PIP will kick in and pay the remainder.

If you are unable to work then the PIP will cover your salary up to 85%, but it is limited to $5,282 dollars per month for a maximum length of 3 years at this current time. This amount is different every year, so you will need to check on current statistics.

Property Protections

The basic property protection coverage or PPI should pay up to $1 million dollars on property, such as homes or businesses. It will even pay for cars that are legally parked and damaged in the accident.

Residual Damage Liability Coverage

The residual bodily injury (BI) and property damage (PD) is designed to protect you from lawsuits unless:

  • You cause a serious bodily injury or death accident
  • You have an accident with a non-Michigan resident with a non-Michigan registered vehicle
  • You are involved in an out-of-state accident
  • You are higher than 50% at fault. You can then be sued for up to $1,000.

BI and PD liability insurance covers the cost of your defense and pays for any damages up to policy limits. In Michigan the minimum coverage you have to carry is:

  • $20,000 for death and injury
  • $40,000 for multiple injuries and death
  • $10,000 for out-of-state property damage

Consequences of No Insurance

Being caught without any auto insurance in the state of Michigan can be a very expensive lesson. You can be convicted of a misdemeanor that involves a fine anywhere from $200 to $500. It can also mean up to a year in jail. It really depends on whether it is your first time, or you are repeatedly caught without insurance. It can also involve a 30 day driver’s license suspension, or at least until you can provide proof of current and valid insurance.

These penalties all pale in comparison to the possible consequences of being sued from injuring or killing someone in an accident. Being sued for property damage without the protection of a Michigan auto insurance policy can be devastating. You can lose your home, business and even personal belongings. It is simply a bad move to make.

Paying a monthly payment without ever filing a claim may be irksome at times, but think about all that it protects you and your family from. You cannot predict when and where an accident will happen. Stay protected with the coverage that you need. You may not need it often, but will be glad when you do and you have it available.

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