Living in Michigan as a broken graduate student and new worker, I’ve always tried to keep my car insurance costs low without paying attention to details. About a month ago, a friend’s car was scratched in a parking lot. Watching her argue with the other driver made me realize how little I knew about auto insurance. So I decided to research on each aspect of my auto insurance coverage to determine the best options for my situation.
I’m using this post to document what I’ve learned and my updated auto coverage.
It’s important to note that Michigan is a no-fault state for auto insurance and has a so-called “mini-tort” system. This means that in an accident, regardless of who is at fault, each driver’s own insurance company pays for the damages to the vehicle and for injuries caused in the accident.
Policy Coverages
Bodily Injury & Property Damage Liability
Michigan SOS’s definition: “Michigan’s no-fault insurance protects insured persons from being sued as the result of an automobile accident, except in certain situations. This includes when the injured party does not have enough coverage to pay for treatment or payment must be made to compensate someone that was killed or seriously injured. This portion of your automobile insurance policy will pay up to your coverage limit amounts if you are found legally responsible for damages in these situations.”
Progressive’s defition: “With Bodily Injury and Property Damage (BI/PD) Liability coverage, we’ll pay for injuries and property damages caused by you while operating your vehicle or while you’re operating somebody else’s vehicle (as long as you have their permission). We’ll also pay for your legal defense if you’re sued because of these injuries or damages.”
Comments and extra info:
- According to 小红书: 把这一项拉满, 拉满也不会增加多少钱，但是真出事儿了100K/300K是最低标准了。
- According to Reddit: “100/300/100 is the absolute minimum anyone should carry. I work in claims and you would be shocked how much companies pay out on claims and how often people are underinsured.”
My choice: $250,000 each person,$500,000 each accident,$100,000 each accident
- Just for better peace of mind, considering it’s affordable and protects against severe financial implications.
Uninsured/Underinsured Motorist
Progressive’s defition: “With Uninsured/Underinsured Motorist (UM/UIM) coverage, we pay for medical bills, lost wages and pain and suffering resulting from bodily injuries when you’re in an accident caused by a driver who either doesn’t have any, or doesn’t have enough, liability coverage.”
Comments and extra info:
- According to 小红书: 你买了 Liability别人不一定买，把你撞了没钱赔咋办？所以这个也肯定要买。
- According to Reddit: “Michigan has one of the highest percentages of uninsured motorists on the road. Absolutely cover yourself here.”
My choice: $100,000 each person,$300,000 each accident
Limited Property Damage
Progressive’s defition: “With Limited Property Damage, we’ll pay up to $3,000 to cover the damages you cause to somebody else’s vehicle. Keep in mind that the damages must be caused by an accident that takes place in Michigan.”
My choice: Selected
- I’m sticking with the $3,000 coverage, aligning with the mini-tort claim limit.
A mini-tort claim can be made when one driver is at least 50% at fault in an accident. The driver who is not at fault (or less at fault) can file a mini-tort claim against the at-fault driver to recover costs associated with the damage to their vehicle.
- If you are not at fault: if your vehicle was damaged in an accident and you had to pay a deductible to get your car repaired under your collision policy, you could use a mini-tort claim to recover up to $3,000 of those costs. If you do not have collision coverage, you could still seek compensation for the damages up to the mini-tort limit.
- If you are at fault: the law protects you from vehicle damage claims that are more than $3,000. If the vehicle damage is far more extensive, the person whose vehicle you struck will have no choice but to turn to their own insurance company to pay the excess vehicle repair costs — assuming that person carries collision coverage on her No-Fault auto insurance policy.
Property Protection Insurance (PPI)
Michigan SOS’s definition: “PPI pays up to $1 million for damage your car does in Michigan to other people’s property, such as buildings and fences. It will also pay for damage your car does to another person’s properly parked vehicle. It does not pay for any other damage to cars.”
My choice: Required by law, I automatically included this with no modifications.
Personal Injury Protection (PIP) Medical Expense
Progressive’s defition: “With PIP Medical Expense coverage, we’ll pay for specific expenses related to an auto accident (no matter who causes it). These expenses include certain medical, funeral, survivor’s loss, work loss benefits, and replacement services expenses.”
Comments and extra info:
- According to Reddit: “Technically, if you have an insurance policy that would completely cover all medical bills from an accident, such as Medicare or qualified health coverage, you could choose to drop PIP. The concern is that we aren’t sure how the health plans would cover long term care from an accident. PIP would cover long term care.”
My choice: Unlimited coverage per person for each accident
- It is only $47 per month and it’s for comprehensive long-term protection.
Personal Injury Protection (Work Loss/Replacement Services)
Progressive’s defition: “With Work Loss benefits, we’ll help make up for a loss of income—up to 85% of your current wages—if you can’t work because of injuries caused by an accident.“
My choice: This item selected by default with PIP.
Vehicle Coverages
Comprehensive
Progressive’s defition: “Under Comprehensive coverage, we pay for damage to the covered vehicle by an event other than a car collision, such as fire, theft, vandalism, hail, or flood damage. Comprehensive also covers damages from a collision with an animal.”
My choice: $1000 deductible
Collision
Progressive’s defition: “With Standard Collision coverage, we pay for damage to your vehicle caused by a collision that exceeds your deductible, regardless of fault.”
My choice: $1000 deductible
- This seems to be the most commonly chosen option. The reasoning of why you should buy is that only opt it out when you can afford a new car.
Roadside assistance
Comments and extra info:
- According to reddit, it is “WORST ROADSIDE ASSISTANCE”.
My choice: Opted not to include it, considering the negative reviews.