By Sabah Karimi
When you’re shopping for car insurance, you may be wondering how much coverage you need and what your options are.
Every state has minimum insurance coverage requirements for different types of insurance, so some of the coverage is optional. If you have a history of accidents or simply want peace of mind that you won’t end up with huge bills in the event of an accident, you might consider higher levels of coverage across all insurance types.
So, here’s what you need to know about how much car insurance you need in Flint Michigan—and a few ways to save money on car insurance, too.
Understanding different types of car insurance
Many people don’t realize there are a few different types of car insurance. Some are optional and some are mandated by the state you live in (Like PIP here in Michigan, more below). Here’s a quick breakdown of the different types of car insurance you can buy:
Liability insurance provides protection if you’re at fault and cause damage to property or to someone’s car. The insurance company will step in to pay repair bills as well as any legal costs associated with the incident up to your policy limits. The two types of liability insurance are Bodily Injury Liability (BIL), to cover you if you hurt someone in an accident, and Property Damage Liability (PDL), to cover you if you damage someone else’s property in the accident.
Personal injury protection (PIP), also known as no-fault insurance (What we have here in Michigan), covers all medical bills for you and your passenger even if the incident was your fault.
Uninsured motorist/underinsured motorist insurance (UM/UIM) will pay your medical bills and other costs if you are in an accident with an uninsured driver.
Collision insurance will pay to repair your car, even if the accident is your fault.
Comprehensive insurance will pay for damages outside of a collision incident, such as vandalism, theft, or hail damage.
Gap insurance is a type of coverage that applies to a financed car. If you think you would struggle to pay off the car loan by yourself if the car was totaled in an accident, you would be covered for the difference in the value of the car and your loan if the car had to be declared a loss. Gap insurance can help you save money in the event of a serious incident, but it’s completely optional.
How much car insurance should I get?
You’ll need at least the minimum level of liability insurance to meet Michigan's insurance requirements. This amount varies by state and you always have the option to buy more coverage if you feel like you want more benefits.
When you start reviewing car insurance options, you’ll notice that minimum requirements are usually expressed as three numbers: XX/XX/XX. These numbers represent bodily injury liability maximum for one person injured in the accident, bodily injury liability maximum for all injuries in one accident, and property damage liability maximum for one accident, in that order.
All states have these limits but some states also have additional requirements, such as uninsured or underinsured motorist coverage or a PIP requirement. Just remember: liability insurance won’t cover damages to your car.
What many people don’t realize is there’s not a huge difference in the cost of your premium if you go as far as doubling liability coverage. If you only stick to the state minimum requirement, you may find you don’t have enough to cover damages and will have more out-of-pocket costs.
Still, you’ll need to buy at least the minimum liability required by your state to avoid paying fines and big bills if you’re driving without insurance and end up in an accident. In some states, it makes sense to have underinsured or uninsured motorist protection because there may be a bigger population of uninsured drivers in the Flint area.
How much comprehensive and collision coverage do I need?
Collision and comprehensive car insurance are usually bundled together, but some insurance companies let you buy them separately. If you live in a high-risk area, are getting a loan from a bank for a high-priced car, or you just want extra protection for peace of mind, it makes sense to have both types of coverage.
You’ll need to choose a deductible amount for both collision and comprehensive coverage. Ideally, you’ll want to choose a deductible that makes sense with your budget and available savings. If you are still making payments on the car, it might make more sense to choose a lower deductible and save money in case you do get in an accident, then increase the deductible when you own the car.
How much PIP car insurance do I really need?
If you don’t have health insurance coverage or if you don’t think you can afford to live without a loss of income if you got into a serious car accident, it pays to have good PIP coverage. Michigan allows Excess Medical if your health carrier will be primary in the event of an auto accident. If not, the other option is Full Medical which pays an unlimited medical costs if you were ever hurt in an auto accident. Some states do require PIP so that you’re covered for any medical bills, serious injuries, and loss of wages, no matter who was at fault. Some states require medical payments coverage and those payments can help to pay the high deductible of your health insurance policy if you ended up filing a claim.
Saving money on your car insurance policy
If you’re apprehensive about paying more than your minimum liability insurance coverage amount to be properly insured, take some time to get quotes from multiple insurance companies and really consider how much you could save if you were involved in a serious accident.
Many drivers make the mistake of thinking they won’t have to worry about accidents because they have a clean driving record and are very cautious drivers. The truth is, an accident can happen when another driver isn’t paying attention or when inclement weather triggers other drives to cause a collision. This is why having adequate insurance coverage is important—and adding on uninsured motorist coverage or gap insurance doesn’t hurt.
There are several ways to make car insurance affordable, even when you decide to get more than the minimum requirement. Here are some tips:
Ask about car insurance discounts. Many people don’t realize how many discounts are available to them when buying car insurance. For example, if you’ve maintained a clean driving record for a certain number of years or have maintained insurance coverage without any gaps in coverage, you might qualify for a discount on your premium.
Increase your deductible. If that monthly insurance premium is just a little out of reach but you still want all the coverage benefits, consider taking less of a risk of cutting down coverage and more of a risk with your savings. Increasing your deductible can help you save money in premiums every month but you’re betting on the chance that you don’t end up needing to file a claim. When you do, you’ll have to pay the high deductible before you can claim any benefits. If you have a solid savings account and are a low-risk driver, this may be the best way to lower your insurance premium.
Drive less often. This sounds obvious, but the less time you spend on the road, the less likely you are to be involved in a serious accident. Driving less will not only reduce the risk of a car accident but can also lower your annual estimated mileage. Your insurance company will ask you how many miles, on average, you spend on the road each year. If you’re not driving very much, you might find your insurance company adjusts your rates to reflect less time on the road.
Eliminate comprehensive and collision insurance if you already own your car. If you don’t have a loan on your car and have some money in savings, you may be able to manage the cost of repairs on your own in the event of an accident. Comprehensive and collision insurance can add a significant amount to your monthly premium so you may not need this extended coverage.
Reconsider optional coverage. Buying uninsured motorist coverage or other types of optional coverage can be a smart move, but take the time to consider whether you really need it. Dropping optional coverage, even if it’s for a short period of time, can help you save some money on car insurance without too much risk.
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