Car Insurance:

Everything You Need to Know
1. Where to start: Choose your agency
 It is important to know the different ways to buy insurance:
  1.  Direct. (Esurance, Geico, The General, etc.) DON'T DO IT!!!!
    • Advantages: There aren't any. Most times, you can find an agency that can give you the same coverage for the same cost, or less.
    • Disadvantages: It is all on you. You lose out on an agent who can tell you when you have gaps, define coverages, fight for you if the company denies a claim, etc. 
    • Myths: They don't save you money by cutting out the agent- they have to spend it on marketing.
  2. Captive. (State Farm, Farm Bureau, Allstate, etc.) BETTER THAN DIRECT
    1. Advantages: You have an agent to help with coverages, billing, paperwork.
    2. Disadvantages: Your agent is directly employed by the only company they offer- their hands are tied when a fight comes. They can only offer you one policy/set of coverages/premium. 
    3. Myths: These companies are not more financially sound or better with customer service. Click the graphics to see your company!
  3. Independent. (Agency like us. Represents multiple companies) IT IS OKAY IF IT IS NOT ME, BUT IT IS YOUR BEST OPTION
    1. Advantages: Ability to compare multiple companies and their unique coverages/pricing, all at once. Are not employees of their companies and can fight for their customer.
    2. Disadvantages: It is harder for us to market because each Independent agency is comprised of an entirely different crop of companies (Our brand recognition is not as strong!!)
    3. Myths: Our companies are not inferior, nor are their rates or service- often times it is just the opposite. Independents fight for the best companies to offer the best service to their customers because they are locally owned and every inch counts for them!
Insurance Company Rankings 2015
Auto-Owners, an Independent insurance company has won the award 5 of the last 6 years.
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Auto-Owners: A++
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State Farm: A+
*Note: State Farm's rating is projected to drop to an A-, based on the graphic above

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​2. The buying process:
  1. ​Pick the agencies you want to use- use at least 2!! AND WALK INSIDE! this will help you get a sense of who you will work with.
  2. They will ask for info about you. Have the following in hand:
    1. Drivers license number and date of birth of any drivers
    2. Vehicle Identification Number (VIN) of all vehicles to go on the policy. (Found in the driver's side door label, under the windshield in front of the steering wheel and dash board or on your state registration)
    3. The coverages you want on your vehicle (DON'T PICK STATE MINIMUM!!!)
    4. If youthful drivers and in school, proof of Good Student Discount
    5. Medical insurance cards if your medical carrier is primary in case of auto related injuries
    6. Other info will be asked that you should be able to answer from memory
  3. They will quote you. The more they are quoting (auto, home, life, health, umbrella, etc.) the longer it will take.
    1. Auto alone should take 15, depending on how complicated your situation is
    2. LET THEM QUOTE ALL OF YOUR INSURANCE- one of your policies may be more expensive than what you are paying now, but your whole account may be cheaper or have better value (extra coverages, better coverages, extra policies!)
    3. KNOW that they cannot just waive a magic wand to create your premium. There are rates/formulas that each company files with the State, which they are obligated to use. Certain info about YOU AND YOUR CAR means more or less $ and the agent cannot just choose this amount.​
  4. They will offer you a quote. ASK to SEE THE COVERAGES!
  5. Compare each offer and its coverages with the others.
  6. Remember, liability is CHEAP- don't skimp on liability.
3. Your coverages explained:

MICHIGAN RESIDENTS REQUIRED TO HAVE:
  1. Bodily Injury: Bodily Injury Liability protects against monetary loss resulting from legal liability for injuries to a person occurring in the United States, Canada or Mexico.
  2. Property Damage: Property Damage Liability protects against monetary loss resulting from legal liability for damage to property of another in the United States, Canada or Mexico
    1. Combined Single Limit (CSL) vs. Split Limit: you have 2 options for this coverage
      1. CSL combines Bodily Injury and Property Damage under one limit, providing flexibility in the use of the limit.
        1. IE: $500,000 BI/PD allows payment for anyone or thing up to $500,000
      2. Split Limits, if you've selected the same "Per Person" limit as your "Per Occurrence" limit, provides you with twice the coverage but is only a couple bucks more:
        1. IE: $500,000 Per Person/$500,000 Per Occurence BI and $500,000 PD, totaling $1million in coverage if you have both types of loss
      3. If your Split Limits are different however, you may be stuck with less in coverage for one persons injuries but more overall for a loss on property and injury
        1. IE: $250,000/$500,000 BI limit and $500,000 PD totals only $250,000 for an individual's injuries but $500,000 for their property, totaling $750,000 for the loss.
  3. ​​​Personal Injury Protection (PIP):Personal Injury Protection (PIP) pays benefits to or on behalf of the named insured for reasonably necessary medical, hospital and rehabilitation expenses, loss of wages, and loss of services resulting from bodily injury to the named insured, spouse or resident relatives. In case of death of the named insured, spouse or resident relatives, death benefits and survivor's benefits, if applicable, will be paid. Injury or death must be the result of an automobile accident. Other persons injured or killed by the insured automobile in Michigan are covered if they have no other Personal Injury Protection insurance available. The named insured, spouse and resident relatives are covered if the accident occurs within the United States, its territories and possessions or Canada. If at time of loss, the insured does not have the correct medical or wage loss coverage, they will be assessed a $500 deductible.
    1. Personal Injury Protection Options

      The following options are based upon household eligibility and apply to all vehicles on the policy. The named insured must choose one of the following options:
      1. Primary Medical and Primary Wage – This option applies if the named insured does not select or is not eligible for any other option below.
      2. Excess Wage - This option may be selected if the named insured, spouse and resident relatives have a wage continuation plan that will pay primary for automobile related injuries.
        1. The opposite, Increased Wage Loss Benefits of $500 can be endorsed for added premium in case your monthly expenses to income ratio requires more protection.
      3. Excess Medical – This option may be selected if the named insured, spouse and resident relatives have health insurance that will pay primary for automobile related injuries.
      4. Excess Medical and Excess Wage – This option may be selected if the named insured, spouse and resident relatives have health insurance and a wage continuation plan that will pay primary for automobile related injuries.
  4. Property Protection Insurance (PPI): Property Protection protects the insured from monetary loss resulting from their absolute liability in Michigan for damage caused by the insured automobile to property of others including damage to automobiles parked so as not to cause unreasonable risk of damage.

OPTIONAL COVERAGES:
  1. Underinsured Motorist: Underinsured Motorist Coverage protects an insured against loss caused by a negligent insured driver with Bodily Injury Liability limits lower than the limits provided under this coverage to the extent that such limits exceed the Bodily Injury Liability limits at which the other driver is insured. When this coverage is written, the limits must be less than or equal to those selected for Bodily Injury Liability. Charge the premium shown in the MI PA UIM Higher Limits.
  2. Uninsured Motorist: Uninsured Motorist Endorsement protects the insured against loss if injury is caused by an uninsured motorist. This coverage is optional. When this coverage is written, the limits must be less than or equal to those selected for Bodily Injury Liability. Charge the premium shown in the Rate Section taking into consideration the type of insured.

    Where the named insured is an individual or a named insured is an individual and his or her spouse, coverage may be written on a specified car basis to protect (1) any person while occupying, getting into or out of the insured automobile; (2) the insured, spouse and resident relatives (who do not own an automobile) while a pedestrian or while occupying a non-owned automobile that is not specifically insured with the Company for this coverage.
  3. Tort Liability: Special Tort Liability Endorsement affords protection for uninsured collision damages, up to $1,000, to automobiles in the State of Michigan. If a person is 50% or more at fault for a collision loss, they are liable for the other party's collision deductible (up to $1,000), or if the other party has no collision, up to $1,000 in damages.​
  4. Michigan Catastrophic Claims Assoc (MCCA): This isn't actually a coverage, but rather a charge that is the same for all companies. It is assessed by the State of Michigan to recoup extreme losses under PIP.
  5. Comprehensive: Comprehensive covers all losses to the insured vehicle except upset or collision and certain other exclusions. This coverage is written for the actual cash value of the automobile
    1. Deductible:This is the portion of the loss the insured is declaring themselves responsible for at time of loss
      1. IE: A loss of $5000 with a deductible of $500, the company pays $4500 for repairs and the insured pays $500
    2. Full Glass: When an automobile is written with Comprehensive coverage, the policyholder may elect to add the Waiver of Deductible – Glass Damage to an item. With this endorsement, the Comprehensive deductible may be waived for the replacement of damaged safety glass.
    3. Actual Cash Value vs. New Car Replacement:
      1. ACV: A loss is paid out for the amount that car could currently sell for in a fair market. DEPRECIATION OF THE VEHICLE IS FACTORED IN
      2. New Car Replacement: The Comprehensive and Collision coverage loss settlement provisions applying to recently purchased new automobiles which are involved in a total loss vary by company and program. The vehicle will be replaced with a new automobile or the original purchase price will be paid if certain conditions are met.
  6. Collision: Coverage for damage to the vehicle if done in the event of a collision (animal collisions being the exemption)
    1. Limited: covers Collision damages when driver of insured vehicle is not more than 50% the cause of the accident
    2. Regular/Standard: covers damage to the automobile caused by any type of collision. Written subject to a deductible
      1. ​Waiver of Collision: When a policy is written to provide Uninsured Motorist and Regular Collision coverage, the policyholder may elect to add the Waiver of Collision Deductible endorsement to an item. With this endorsement, the Regular Collision deductible may be waived for an accidental collision caused by the identified owner or operator of an uninsured automobile who is more than 50% at-fault for the damage.
    3. Broad: covers collision damages regardless of who is responsible for the accident. Deductible selected is applicable if driver of insured vehicle is more than 50% the cause of the accident
  7. Towing: Also known as Road Trouble Service reimburses the insured up to the limit written (sometimes an unlimited amount) for expenses incurred for towing the covered automobile to the nearest garage and the cost of labor performed at the place of emergency as a result of failure of the automobile to operate. This coverage may be written on private passenger or utility automobiles, low speed vehicles, motorcycles, antique automobiles, classic automobiles, and converted automobiles.
  8. Rental Reimbursement/Extra Expense: Additional Expense Coverage may be included in a policy which affords Comprehensive, Limited Collision, Regular Collision or Broad Collision coverages on a private passenger automobile, low speed vehicle, or motorcycle. Subject to the provisions of the endorsement, additional expense coverage reimburses the named insured for additional expenses necessarily incurred as the result of a loss for which indemnity is afforded under the Comprehensive, Limited Collision, Regular Collision or Broad Collision coverages of the policy
  9. Loan/Lease Gap: This endorsement provides coverage limits in excess of the actual cash value of the leased or financed private passenger automobile. Coverage would apply at the time of a covered theft or total loss when our insured is liable for an amount greater than the actual cash value of the automobile because of the lease or loan agreement
  10. Accidental Death: Provides a specific limit in the event of accidental death of an eligible person.
  11. Pet Medical Coverage: provides coverage in the event a policyholder’s cat or dog is injured or killed when a vehicle they are riding in is involved in an accident.
  12. Non-Owned Auto Coverages: ​If the named insured is an individual and the policy covers at least one private passenger or utility type automobile with a gross weight of 15,000 pounds or less, excluding motor homes, all coverages afforded to the described automobile extend to the use of most non-owned automobiles by the named insured, spouse or resident relatives who do not own an automobile. However, there are some situations in which coverage for non-owned automobiles is not provided. Below are two non-owned automobile coverage options
    1. Extended Coverage - Non-Owned Automobiles Furnished or Available for Regular Use, may be added to an individual's automobile policy to extend liability coverage for the operation of private passenger automobiles which are furnished or available for regular use. Liability coverage will extend to the individual named on the endorsement, his or her spouse who resides in the same household, and resident relatives who do not own an automobile. THINK COMPANY CAR
    2. Broadened Coverage For Named Individuals Endorsement - Drive Other Cars, may be added to an automobile policy to extend non-owned automobile coverage to a named individual who is a resident of the same household. THINK UNRELATED HOUSEHOLD MEMBERS
      1. All coverages shown in the Declarations applying to this automobile will extend to the individual named in the endorsement, his or her spouse and all resident relatives who do not own an automobile.
  13. ​Named Operator Policy: A person who does not own an automobile but has a need for coverage for the operation of non-owned automobiles may be afforded protection under a Named Operator Policy, Endorsement 79597 (MI). The following coverages may be written:
    1. Bodily Injury Liability (Mandatory)
    2. Property Damage Liability (Mandatory)
    3. Personal Injury Protection (Mandatory)
    4. Property Protection (Mandatory)
    5. Special Tort Liability
    6. Uninsured Motorist Coverage
    7. Underinsured Motorist Coverage


MCCA Fee:  Michigan Catastrophic Claims Association (MCCA) provides coverage for unlimited medical benefits (Personal Injury Protection) for an automobile accident victim where medical costs exceed $545,000. A substantial portion of this premium charge is allocated to MCCA. MCCA, Michigan Automobile Insurance Placement Facility (MAIPF) and Michigan Automobile Theft Prevention Authority (MATPA) are programs established by the State of Michigan. MAIPF is a mechanism for providing coverage on persons not insured in the standard market. MATPA oversees automobile theft prevention programs. 

*Know your Discounts*
Group Discount: Credit Union Member, Alumni of University, State  Employee, AARP, etc. 
Good Student: Typically 3.0 or better
Vehicle Discounts: airbags, alarms, ABS
Claim History: 
MVR History: 
Multi-Car:
Insurance Score:
Payment History:
Daily Drive Average:
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Michigan No-Fault Explained by the State, Itself

michigan_no-fault_auto_insurance.pdf
File Size: 1350 kb
File Type: pdf
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It is important to remember that Motorcycle Insurance is part of the Personal Auto picture. Make sure you know what your policy provides for your motorcycle or moped needs!

(More to come)
Auto insurance is a must have if you are going to drive- not because we say so, but because it is required by the state. It protects you, your vehicle, and others on the road from both physical and mental injuries. 


Think you are covered under another person's policy because that is where the car is insured? You likely are not covered unless you are a named insured or named driver on that policy. If you drive a vehicle and are not named on any policy, you are likely driving illegally and could be ticketed. Even worse, if in an accident, you could be scraping to find coverage for any damages. Don't let this happen to you- call and make sure you are properly insured!
PL/PD:
An outdated term referring to being covered for Personal Liability and Physical Damage only. The correct term for this in today's Michigan insurance is "No Fault Only" as the state of Michigan (an "No Fault" state) now requires more than just PL/PD.