There is a minimum amount of car insurance that you must purchase for your vehicle in most states. This ensures that you can cover medical costs and property damage if you are found at fault in an accident.
Each state’s minimum is different, so you must research your state to determine how much car insurance is required for you to drive legally.
Though you may ask yourself, “how much car insurance do I need?” You may want to reconsider that question and ask a professional insurance agent how much coverage will protect you, your vehicle, and your savings account if you were involved in an accident.
While your state’s minimum coverage amount may be the cheapest alternative, it will typically only be more affordable for now. In the long run, your best bet may be to purchase more than the required amount or, at the very least, consider add-ons.
If you are in an accident, your state’s minimum could very well be inadequate and not provide much coverage for your own vehicle’s repair bills.
If you are unsure whether the minimum amount is better for you or if you would benefit from more coverage, reach out to your agent.
Types of insurance coverage
Understanding the many types of insurance coverage types available to you can help you develop a policy that will meet all of your specific needs.
If you cause an accident, liability insurance will cover the costs of the other driver’s injuries. Bodily injury liability is required in all states aside from Virginia and New Hampshire. In Michigan, you will need a minimum bodily injury coverage amount of $50,000 per person and $100,000 per accident.
Property damage liability
When you or another family member on your policy damages another person’s car or property, this specific liability coverage protects you. The minimum coverage in many states is $10,000.
Personal injury protection (PIP)
PIP is mandatory in Michigan, but the amount of coverage you choose depends on your health care coverage and preferences. If you or your passengers are injured, personal injury protection helps pay for medical expenses and lost wages.
Uninsured motorist and underinsured motorist
If you are in an accident with someone that does not have insurance or has an inadequate policy, (UM/UIM) will protect you, and it can help pay for medical costs and damage to your vehicle.
Regardless of who is at fault, collision coverage pays for damage to your vehicle that resulted from an accident. It can also help with property damage costs and cover a new car if your current one is totaled.
Comprehensive helps pay for the repairs or replacement of your vehicle if it is damaged from incidents such as theft, vandalism, fire, or natural weather disasters.
Additional coverage options
While meeting the bare minimum is essential for legal reasons and protecting yourself and your assets, there are additional types of coverage that can further protect you.
Purchasing this add-on can get you the difference between your car’s cash value and actual value if your vehicle is totaled. For instance, if you are in an accident and owe $20,000 but your vehicle is only worth $18,000, this coverage will pay the $2,000 gap.
This coverage will pay for a rental vehicle or transportation fees for the bus or fares while your vehicle is being repaired.
If your vehicle breaks down or another unfortunate event occurs, this pays for towing services, a locksmith, jump-start, fuel delivery, and getting a flat tire changed.
Why do I need insurance?
While it is mandatory to have at least the minimum coverage amount, having an insurance policy can offer you peace of mind.
Life is full of accidents and unplanned events, and protecting yourself from those hassles is the best way to stay prepared and ease your mind.
To drive legally, you must purchase an auto insurance policy.
If you are pulled over and unable to show proof of insurance, you can be looking at a fine of $200-$500, suspension of your license, and jail time. You will also be unable to renew or purchase registration for your vehicle without insurance.
If you are in an accident and uninsured, you will be responsible for your medical bills, vehicle damage, as well as the medical bills of the other driver you injured.
An insurance policy protects your financial future and from being sued. The cost of car repairs and medical expenses can quickly drain your savings account. Without insurance, tragic accidents can lead to debt, court, lawyers, and jail time.
The amount of coverage you purchase will depend on your lender, state, and preferences. You should always check your state laws and speak with your lender to ensure that you have enough protection.
Once you determine how much insurance is required, you can speak with your insurance agent to decide on the best policy for you. You may want more than the minimum amount of coverage.
Protect yourself with Frost & Remer
In Michigan, to be a legal driver, you must have three types of auto insurance coverage, and these make up your Liability and Property (PLPD) coverage.
At Frost & Remer, we are all about protecting your family, vehicle, home, business, and assets.
If you would like to learn more about your current policy or purchase a new one, schedule a virtual appointment, and we can discuss what type of coverage may benefit you the most.
We can offer you a free full policy review and risk assessment while answering any of your questions and concerns.
Reach out to us today to learn more about our discounts, bundles, and insurance policies.