People purchase liability insurance policies to cover accidents they may cause. For instance, if you seriously injure someone in a car accident in Michigan, your liability policy will pay for the damage up to your policy limits.
But insurance policies don’t provide blanket protection. Suppose the crash resulted in medical expenses exceeding the victim’s no-fault insurance limits and they file a personal injury lawsuit against you. Recent changes in Michigan’s No-Fault law makes this situation more likely. In that case, you could find yourself in a precarious financial position. An umbrella insurance policy could give you an extra cushion, particularly if you have significant assets at stake.
What Is Umbrella Insurance?
Umbrella policies essentially extend your basic insurance coverage to a higher limit. An umbrella policy can protect you from losing assets or having to pay huge out-of-pocket costs if you get sued after an accident.
An umbrella policy pays for whatever amount is left over after you exhaust your auto liability policy’s limits. Keep in mind that umbrella policies have limits, too. If you owe more than what you purchased in umbrella policy coverage, you may still be personally on the hook for some accident-related costs.
What is Covered Under an Umbrella Insurance Policy in Michigan?
Umbrella insurance policies will provide extra coverage for damages such as:
- Serious injuries: Michigan is a no-fault auto insurance state. If you cause a car accident, the victim will first turn to their insurance policy (known as PIP, or personal injury protection) to cover their medical expenses. However, if they sustained a “serious injury” such as permanent, significant disfigurement or impairment of a body function, they might be entitled to file a claim for excess medical expenses against you. An umbrella insurance policy protects you in the event of a serious injury car accident.
- Pain and suffering: Compensation for pain and suffering can include physical pain and emotional distress stemming from a collision. Post-traumatic stress disorder (PTSD) is an example of an emotional injury.
- Legal fees: An umbrella policy can also provide coverage for legal fees you may incur due to the crash. Litigation can quickly get expensive, but an umbrella policy will protect you by covering the cost of attorney fees, court costs, and other legal expenses.
Should You Get an Umbrella Policy if You Already Have Car Insurance?
Some insurance is mandatory in Michigan. However, the car accident attorneys at Christensen Law always advise clients to buy as much insurance as they can afford. Umbrella insurance policies can provide millions of dollars in extra protection and are generally not expensive. You can protect yourself financially by taking out an umbrella policy as an extension of your current insurance coverage.
Need Personalized Legal Advice? Contact Us Today
Navigating the insurance claims process after a car accident can be confusing. Let a Michigan car accident attorney from Christensen Law help. We can review your insurance policy and identify every possible source of compensation for you. Call or contact us today for a free consultation.