This blog describes 5 signs of a good car insurance policy. Although we often think all car insurance policies are the same, this is simply not true. Please use this as a way to review and improve your own Michigan auto insurance policy.
1. Uninsured Motorist
this is extremely important. Under liability coverages, look and make sure you have uninsured motorist coverage. Uninsured motorist coverage covers you if you are injured due to the negligence of an uninsured driver. In some areas of this state, at least 25% of motorists do not have any auto insurance. This means if they cause an accident, you may have no way to obtain compensation from them for your injuries. However, if you have uninsured motorist coverage, your own car insurance company steps in and pays for your pain and suffering.
2. Underinsured Motorist
this is also extremely important. Under liability coverages, look and make sure you have underinsured motorist coverage. Underinsured motorist coverage covers you if you are injured due to an underinsured motorist. This means if another driver causes an accident, and the injuries you sustain are worth more than the liability insurance they carry, you have been injured by an underinsured driver.
Many motorists carry only the $20,000 minimum in liability coverage. To protect yourself, purchase underinsured motorist from your car insurance company. That way if you are injured by an underinsured motorist, your own car insurance company steps in and pays additional money for your pain and suffering.
3. Full Medical
This means you have what’s called an uncoordinated policy. Under Personal Injury Protection, look and see what is listed. The policy will say either “excess medical” or “full medical”. If you have excess medical, you have a coordinated policy and your car insurance will pay medical bills only after your health insurer pays. With a coordinated policy, sometimes you are limited in your treatment options.
But if your policy says full medical, you have an uncoordinated policy. This is a good thing because an uncoordinated policy provides greater access to medical care, quicker access to medical care and sometimes involves less paperwork and frustration with your health insurer, like Blue Cross/Blue Shield or HAP.
4. Broad Collision
This means you have the highest protection of collision coverage available. This is a good thing because under the Michigan no-fault law, you are responsible for insuring your own vehicle – even for physical damage caused by another motorist. If you have broad collision coverage, your own insurance company pays for the physical damage to your car, even if you were at-fault for causing the accident. Your own insurance company will also pay if your parked vehicle was hit and you don’t know who caused the damage.
5. Named Insured
In most policies, the “named insured” is the policyholder or any family member injured in an auto accident. However, many different people may live in a household or have access to the vehicle. It is important you cover as many people as possible that have regular access and are allowed to drive the vehicle. That way, if anybody is injured while operating the vehicle, the car insurance company won’t investigate the claim and deny coverage.
How do you properly shop for these types of insurance policies?
- First, don’t purchase car insurance from a captive insurance agent. A captive insurance agent works for a specific auto carrier and only sells policies for that one carrier. The classic example is the State Farm agent. Captive agents are generally nice people but they don’t shop multiple insurance companies for the best price. They simply sell you the insurance for the company they work for. As a result, you usually don’t receive the best insurance for the lowest price.
- So instead of using a captive agent, use an independent agent. An independent agent represents and sells insurance from more than one carrier. Independent agents can be found in the Yellow Pages or online. Another great way to find a reputable independent agent is by asking friends and co-workers. Don’t be afraid to ask.
- The Internet is your friend. A good way to compare prices is by shopping online. This is a quick and easy way to comparison shop and get quotes. But be careful. Insurance companies have gamed the online system. After obtaining your information, and through the use of specific algorithms, they can intentionally price you out when comparison shopping. The good old telephone is often the best way to get a solid car insurance quote.
- The service you receive from the car insurance company following a claim is vitally important. A good resource is the Michigan Department of Insurance and Financial Service (DFIS). This organization run by the State of Michigan displays a complaint ratio information.
- Ask people in the know. Although we all trust our family and friends, unfortunately they are not always experts, especially when it comes to car insurance. That’s why you should ask people in the know. Call lawyers or business owners who have dealt with insurance in the past. Very often they can give you the quick low down on who is good at paying out a claim and who is not. Heck you can even call us!
