Are You Covered?

by SCarney on ‎01-04-2016 12:33 PM - last edited on ‎01-12-2016 09:02 AM by Lithium Technologies (1,895 Views)


Insurance can be complicated. Test your knowledge with this quiz.


Q: You’re driving down an older, neglected road and suddenly hit a serious pothole. Does your insurance policy cover the damages?
A: Potholes, curbs and parking blocks may not seem like a serious road hazard—until you hit one. Stationary objects like these can cause significant damage to your car. The collision coverage component of your insurance is written for just this kind of accident. Remember, though, that state law does not require you to carry collision coverage, so check your policy to see that you have it. However, if you’re still making payments on your car, your lending institution may require this coverage.


Q: A deer jumps onto the street out of nowhere, right in time to collide with your car! Are you covered?
A: Though potholes and deer can cause similar levels of damage, your insurance handles these claims under different provisions. If a deer jumps into your path, the accident may not be considered your fault. The comprehensive coverage component of your insurance will cover damage claims resulting from collision with animals. Be aware, though, this is another type of coverage Michigan law does not require you to carry.


Q: A thief breaks into your car and steals your laptop. Will your insurance cover the cost to replace the laptop?
A: Personal property losses are typically covered by homeowners or renters insurance. Your auto insurance policy will not cover the loss of the laptop itself. Speak with your agent if you frequently carry valuable items in your vehicle to help you determine the best way to meet your coverage needs.


Q: Wham! A car slides into your (empty) passenger side door in a minor intersection scuffle. You’re injured, but only a little. One thing is clear—it was the other driver’s fault.  What happens now?
A: Under Michigan’s No-Fault Law, your Personal Injury Protection (“PIP”) coverage would pay for your reasonably necessary medical expenses, no matter who is at fault. The objective of No-Fault insurance is to provide quick and accurate payment for accident victims instead of going to court to determine who is responsible for the injuries.


PIP is a component of the No-Fault law, which all owners or registrants of motor vehicles in Michigan are required to purchase. It provides coverage for reasonable and necessary medical expenses, without a monetary cap. It also provides coverage for wage loss.

What if the driver doesn’t have insurance?
Unfortunately, this is all too common in Michigan—where our No-Fault laws cause our insurance premiums to be so expensive that many are forced to opt out entirely. In fact, more than 1 in 5 drivers in Michigan do not have insurance.


Rest assured that if you’re in an accident with an uninsured driver, the benefits you receive will be exactly
what you paid for in your policy. Your existing insurance benefits do not change just because the other driver was uninsured. However, uninsured drivers contribute to higher premiums for all Michigan drivers, as fewer drivers contribute to the collective funding of unlimited lifetime medical benefits.


Q: You’ll need a rental car while repairs from an accident are made to your vehicle. Is the cost of the
rental car covered?
A: It depends on whether you opted to include rental car coverage when you bought your policy. Car rental is an optional add-on for most insurance companies. It must be in place on your policy before you get into an accident. Check your policy to see if your rental car coverage is sufficient to rent the type of car you normally drive.


Learn more about No-Fault insurance on AAA’s Understanding Auto Insurance page (MI only). While you’re there, we encourage you to be part of the conversation—feel free to ask questions and share your opinions.


Disclaimer: The scenarios above are intended for informational purposes only. Coverage is subject to policy terms, conditions and exclusions and the unique facts and circumstances of the individual claim, and each claim is evaluated on the merit of all facts.


A version of this story appears in the January/February issue of AAA Living magazine.


Image credit/source: iStock

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