Michigan car insurance can be confusing. The insurance policies and the declaration page that accompanies the policy can be equally confusing. Each policyholder who purchases Michigan car insurance receives both an insurance policy and a declaration page. Understanding what a declaration page means is important because it describes the financial protections and coverage you have purchased with your policy.
This article explains the contents found in a declaration page and what they mean.
The Address and Policy Period
At the top of most declaration pages is the name of the policyholder(s), or “named insured”, as well as the address of the named insured. The named insured refers to the person or people entitled to all the benefits of the insurance policy. However, family members and other individuals may also be entitled to benefits and protection under the policy even if they are not a named insured.
It is very important to make sure the address listed on the insurance policy is where the vehicles stay overnight. This is called the “garage” location. If the address on the declaration page is different than the actual location of the vehicles, the insurance company can claim fraud or misrepresentation and deny payment of all benefits after a crash.
This act of rescinding car insurance policies – or refusing to pay car insurance claims based on an inaccurate address – is becoming a popular tactic by Michigan car insurance companies to not pay benefits like lost wages, medical expenses, and pain and suffering.
Near the address of the insured, the policy period for the insurance will also be listed. Many policy periods in Michigan are six (6) months. However, you must be up to date on your insurance payments to make sure the policy does not lapse. Many insurance policies require a payment every month.
The Listed Drivers and Excluded Drivers
After the address of the named insured(s) and the policy period, a list of the motor vehicles covered by the policy is usually found next. The make, model and year of the car is listed, as well as the VIN. Sometimes an estimated value of the car is included as well as the number of drivers for the particular car.
Check to make sure the vehicles you want listed are included in this section. If a vehicle is not included, then it won’t be covered if a car accident occurs.
In addition, excluded drivers for a particular vehicle will be listed in this section. Excluded drivers are not drivers not permitted to drive the car. If they do and cause a crash, the car insurance company does not have pay this claim or provide coverage to the excluded driver.
Bodily Injury Liability
The next section is the most important because it lists the actual coverages the insurance policy provides. The entire point of purchasing auto insurance is to provide coverage, or financial protection, in case an accident or loss occurs.
The first coverage listed refers to “Bodily Injury” or BI coverage. Bodily injury coverage is the amount of money your car insurance company is obligated to pay to another person if you or another driver causes a car crash that results in personal injury. Most bodily injury coverage has a single limit for each person and then a limit “per occurrence” or per crash. For example, if the coverage is 50/100, this means the most the car insurance carrier must pay each person up to $50,000 for personal injuries. The most the insurance company must pay all individuals injured in the crash is $100,000.
Limited Property Damage
Limited property damage is optional but most policies include it. Under Michigan’s mini-tort law, the most an at-fault driver must pay for the vehicle damage caused by a crash is $3,000. This is the section that provides for mini-tort coverage.
Personal Injury Protection (PIP) Medical Expense
Personal injury protection (PIP) refers to the no-fault benefits each person is entitled to receive if they are involved in a motor vehicle accident. Almost all Michigan policies automatically include PIP medical coverage. This is the amount the car insurance must pay for medical expenses resulting from a Michigan car accident. The amount of medical coverage you purchase can vary. Policies can include:
- Unlimited medical coverage
- $500,000 medical coverage
- $250,000 medical coverage
- $50,000 medical coverage – for Medicaid beneficiaries only who meet certain conditions
- No medical coverage – for certain individuals who have a qualified health coverage
PIP coverage also provides wage loss benefits and payment to family members for household chores, also known as replacement services. All Michigan policies have this benefit, even if you opted-out of PIP medical coverage.
Most PIP coverage includes a deductible. The deductible amount will be listed in this section. In addition, whether medical is primary or excess may also be found here. If medical coverage is primary, this means your auto insurance is primary for the payment of medical expenses, not your health insurance. This is called uncoordinated coverage.
Uncoordinated coverage makes payment easier to your doctor and hospital, which will in turn make it more likely they see you. In addition, you are not restricted by your health care insurance. For example, if your health plan is an HMO, you must follow the guidelines of the HMO. But if auto is primary, you can see any doctor you want, even if they are out-of-network from your health insurance HMO plan.
Property Protection Insurance
This is mandatory coverage and provides payment if you or someone else driving your car causes damage to a building, highway or other structure. This limit is $1,000,000. This coverage does not apply to vehicle damage. That is covered by coverage collision, as explained below.
Uninsured/Underinsured Motorist
This coverage is not mandatory, so not everybody will see it listed on their declaration page. However, it is very important. Uninsured motorist (UM) coverage is money paid by your own insurance company for pain and suffering from a car accident caused by an uninsured vehicle.
Underinsured motorist (UIM) coverage refers to money your own car insurance company will pay for pain and suffering from a car accident caused by a vehicle whose bodily injury (BI) limit is less than what the personal injuries are worth.
Because of the large number of Michigan drivers operating cars and trucks without car insurance, or just the $50,000 state minimum, we highly recommended to purchase UM and UIM coverage. It is usually inexpensive and will save you if you are injured by a hit-and-run driver or uninsured driver.
Collision or Broad Form Collision
This is coverage for any physical damage that occurs to your listed vehicles. It is not mandatory so if you don’t see it on your declaration page you probably don’t have it. If collision coverage is listed, then it has been purchased. Collision coverage is important because it require your car insurance company to pay the vehicle damage that occurs from a wreck, subject to the deductible.
If you don’t have collision coverage, then your own car insurance carrier does not have to pay for auto collision damage. And because Michigan is a no-fault state, the other person’s car insurance does not pay for your vehicle damage, even if they caused the accident. They are only responsible for paying your deducible up to the $3,000 mini-tort limit.
Public Liability and Property Damage – PLPD
PLPD, or Public Liability and Property Damage, refers to the minimum state required liability limits of auto insurance on a vehicle, as described above. In Michigan it is $50,000. This coverage offers pays for personal injuries your vehicle caused, but offers no coverage for the vehicle damage. If you only have PLPD, and no other coverages like collision or comprehensive, then insurance will not pay for the vehicle damage to your car.
Compressive Insurance
Comprehensive insurance protects against damage to your vehicle caused by non-collision events that are outside of your control. This includes theft, vandalism, fire, weather events, deer accidents, glass and windshield damage, or other acts of nature It is not mandatory.
MCCA – Michigan Catastrophic Claims Association
Under Michigan law, some policyholders must pay a MCCA assessment. The MCCA refers to the Michigan Catastrophic Claims Association, which is the association that pays for catastrophic car accident claims. The state of Michigan changes the MCCA assessment each year.
Michigan Car Insurance Lawyers Who Will Win Your Case
We hope you found this article helpful. Although there are other potential coverages available to Michigan car policyholders, this list includes the main ones. Should you have any questions following a Michigan car accident, please contact us toll free at 1-800-LEE-FREE (1-800-533-3733). One of our representatives is standing by to answer your questions.
