Why an Umbrella for Your Michigan Vehicle?  

Nuance of No-Fault Reform Creates Risk Exposure

Nuance of No-Fault Reform Creates Risk Exposure

In Michigan, no-fault auto insurance reform took effect in July 2020. How did these laws shift policyholder coverage? Liability risk increased significantly for an at-fault driver. 

At-fault drivers are now responsible for, and therefore be sued for, excess lifetime medical expenses. These are no longer fully covered if an injured person did not select "Full" Personal Injury Protection (PIP).  The at-fault driver may also be liable for pain and suffering compensation, which was the primary liability exposure prior to no-fault reform. 

An Umbrella policy, also known as Excess Personal Liability, is an affordable, comprehensive way for Michigan drivers to protect themselves on the roads. An Umbrella policy provides coverage above your Auto and Home liability limits as well as other policies such as Watercraft or Motorcycle.

The premium is typically only $250 per year for $1 million of coverage to protect your current assets and financial future. 

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Umbrella policies reduce the risk of liability for drivers 

Since policyholders may be responsible for damages during an auto accident, an umbrella policy could come to the rescue. It would provide coverage for the difference between the damages caused in an at-fault accident and the liability limits on that driver’s auto policy. With coverage, you ensure:

  • Protection for the at-fault driver’s personal assets. Without an Umbrella policy, personal assets could otherwise be used to pay for the liability of the accident (like medical expenses, pain, and suffering).
  • Protection for your future. If your policy limits were exhausted, the at-fault party would still be expected to pay what’s owed after an accident. That could include dipping into your family’s future income if your current assets were inadequate.

They’re low cost considering the high coverage they offer. 

Umbrella policy coverage limits range from $1 million to $5 million at a low cost to consumers, starting at $125 per year. That means it can be one of the smartest and most affordable safety nets you have – protecting both you and your assets in case of an accident.  In addition to the extended coverage limits, you also receive legal defense outside of the limits.  

They can extend liability coverage to your home, boat, motorcycle, watercraft, and recreational vehicles.

Umbrella policies don’t stop at covering auto policy gaps. In fact, they can extend to many other areas like your home, boat, and recreational vehicles. But how does that work?

At their core, umbrella policies provide coverage past underlying limits if you were found liable in a situation. Let’s say someone got seriously injured on your property and your homeowners policy liability limits weren’t enough to cover medical expenses. An Umbrella policy would come into play to cover the gap in coverage. If a similar situation happened on your boat or recreational vehicle, the same outcome would apply.

They provide critical coverage in Michigan, and beyond.

No matter where you live, having extra coverage and peace of mind is invaluable.  An Umbrella policy generally provides worldwide coverage if you are found to be negligent in an accident that caused injuries.  

We thank our partners at Frankenmuth Insurance for collaborating on this information. Click below for your FREE/No-Obligation Proposal for your Home and Auto including an Umbrella policy.

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