Michigan is known for its unique auto insurance system, particularly its no-fault insurance laws, which are designed to ensure that drivers receive compensation for injuries and damages regardless of who caused the accident. However, one essential aspect of auto insurance that often flies under the radar is uninsured and underinsured motorist coverage. This type of coverage is especially important in Michigan due to the high number of drivers on the road who are either uninsured or lack sufficient insurance to cover the damages in a serious accident.

In this blog post, we’ll break down what uninsured and underinsured motorist coverage is, why it’s important, and how it works within Michigan’s no-fault system.

What is Uninsured and Underinsured Motorist Coverage?

Uninsured and underinsured motorist coverage protects you in the event that you are involved in an accident with a driver who either:

• Has no insurance (uninsured motorist); or

• Has insufficient insurance to cover the costs of the damages and injuries (underinsured motorist)

This type of coverage is not mandatory in Michigan but is highly recommended. Let’s take a closer look at each type:

Uninsured Motorist Coverage (UM):
Uninsured motorist coverage kicks in when the at-fault driver in an accident has no insurance. Despite Michigan’s mandatory insurance laws, a significant percentage of drivers in the state remain uninsured. If you’re hit by an uninsured driver, your uninsured motorist policy will cover your pain and suffering, as well as excess economic damages (i.e., damages not covered by no-fault insurance and/or coordinated insurance coverage, such as private health coverage and long term disability).

Underinsured Motorist Coverage (UIM):
Underinsured motorist coverage is useful when the at-fault driver has some insurance but not enough to fully cover the damages. In Michigan, the minimum liability limits are only $50,000 per person, $100,000 per incident, which is often not sufficient to cover the damages associated with a serious accident. Underinsured motorist coverage makes up the difference between the at-fault driver’s insurance limits and the damages costs you suffer.

Why You Need Uninsured and Underinsured Motorist Coverage in Michigan

There are numerous reasons to carry Uninsured and Underinsured Motorist Coverage:

1. The Reality of Uninsured Drivers in Michigan

Unfortunately, many drivers in Michigan operate their vehicles without insurance coverage—I’ve seen it time and again in my career. Even though Michigan requires drivers to carry insurance, many do not comply, either due to financial reasons or negligence. If you are hit by an uninsured driver and don’t have uninsured motorist coverage, you will no be able to make a claim for pain and suffering or excess economic losses.

2. Rising Medical Costs

Severe car accidents often lead to significant medical bills that can exceed the personal injury protection (PIP) coverage you have. Even if the at-fault driver has the state’s minimum insurance, it might not be enough to cover all the costs associated with medical treatment, rehabilitation, or even long-term care.

3. Inadequate Liability Insurance

In Michigan, the minimum required liability coverage for bodily injury is $50,000 per person and $100,000 per incident. While this might sound like a lot, it can quickly be exhausted if the accident involves serious injuries. Underinsured motorist coverage ensures that you are not financially burdened by someone else’s inadequate insurance.

Choosing the Right Amount of Coverage

When selecting uninsured and underinsured motorist coverage, it’s essential to consider your personal needs and financial situation. While Michigan does not mandate these coverages, they offer significant protection and peace of mind. Typically, you can purchase UM and UIM coverage in limits that match your bodily injury liability limits. For example, if you have a $250,000 per person bodily injury liability limit, you can typically purchase up to $250,000 in UM or UIM coverage.

Conclusion: A Critical Safety Net in an Unpredictable World

Uninsured and underinsured motorist coverage is an essential safety net for Michigan drivers, offering protection from the financial fallout of accidents involving drivers with no or insufficient insurance. While Michigan’s no-fault system provides robust protection for many types of losses, it has limitations when dealing with uninsured or underinsured motorists.

 If you’re a Michigan driver, review your current auto insurance policy to ensure you have adequate uninsured and underinsured motorist coverage. It's a small investment that can protect you from significant financial hardship after an accident, helping to ensure that you and your loved ones are properly safeguarded on the road.