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When It Pours


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When It Pours

The state of Michigan passed a bill that will revamp the current auto insurance laws in an effort to reduce insurance costs for consumers. Among the changes coming is a change to the minimum liability limits required for registering/operating your automobile. Currently the state of Michigan requires minimum insurance limits for Bodily Injury Liability to be $20,000 per person and $40,000 per accident. The new limits effective 07/01/2020 will change to $50,000 per person and $100,000 per accident for newly-written business or defaulted to $250,000 per person and $500,000 per accident for current insurance holders (which can be lowered via a signed selection form).

With the liability requirements for auto insurance increasing, we surmise that the state of Michigan is expecting an increase in Bodily Injury lawsuits due to policyholders choosing inadequate medical coverage for automobile accidents. Because of this, we are recommending people purchase an Umbrella Liability policy to help add an additional layer of liability to protect their assets.

What is an Umbrella Liability policy?

– A secondary or “excess” liability policy that covers losses in excess of the limits contained in your auto/home/watercraft/motorcycle/recreational vehicle insurance policies.

– The base limit is $1,000,000 with the ability to purchase more coverage in some cases of up to $10,000,000 subject to additional underwriting guidelines.
What does it cover?

– The portion of a settlement or judgement that exceeds the underlying policy’s liability limit as well as legal fees associated with the lawsuit.
– If the underlying policy covers the loss, the Umbrella Liability policy also covers the loss.

– Some examples would be serious bodily injury, significant property damage, libel or slander, & malicious prosecution.

Do I need an Umbrella Liability policy?

The questions you need to ask are:

– What is my current net worth? (what you own minus what you owe)

– What is my future income? (how much will your annual income be until you pass away)

– What are my future financial liabilities? (children’s college, retirement plan, etc.)

If you’re in your early 20’s, single, broke, a renter and in reasonable good health, you could get away with not having an Umbrella Liability policy. But if you’re married with an established family and some assets such as a house, you may want to consider purchasing an Umbrella Liability policy to cover those assets in case of a liability lawsuit.

What does an Umbrella Liability policy cost?

– Depends on the carrier/underlying policies/rating details. Typically a $1,000,000 Umbrella Liability policy can be had for less than $200/yr.



Contact Us!

At M. Vander Plow Insurance Agency, we can work with you to make sure you’ve got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. Just give us a call at 616-396-1497 or send us a note at marsiljeins@gmail.com. We want to help you meet your goals, and make sure what’s important to you is protected!

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