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Why a Personal Umbrella in Michigan may be more important than ever!

On May 30th, 2019, Governor Gretchen Whitmer signed into law the long-anticipated
Auto Insurance reform bill on the porch of the Grand Hotel on Mackinac Island.
This law made sweeping changes to the way medical claims would be paid by auto
insurers, as well as provided options to residents to lower their annual costs.
Prior, Michigan had mandated the highest level of Personal Injury protection in
the nation, by far. All licensed drivers were required to carry Unlimited
Medical protection. With the change in the law, Residents are now given the
option to keep Unlimited protection, or select options of $500,000, $250,000,
and in some circumstances $50,000 or Waive coverage all together.

There is a common misconception, that you cannot be sued because Michigan is
a no-fault state. However, this applies to the physical damage to your vehicle,
not Liability. Should you be found negligent, you most certainly may be sued.
This is how Michigan’s No-Fault laws have always worked. However, in the past
the Auto Insurance covered all the medical bills to infinity, so there was a
lot less to sue for. Well now people have options and may not carry unlimited
medical, so when they choose a lower cap or $50,000 because they are on
Medicaid, where do you think, they are going to look when the money runs out? I
can tell you that to be on Medicaid, they cannot have significant assets or
savings.

Should you be sued for Personal liability, your Assets, Savings, and Future
Earnings are all at risk. In this instance, the Plaintiff will first seek
damages from your insurance policies. However, if your insurance coverage is
insufficient, they will seek additional damages and typically use the at-fault
parties net worth as the barometer. Don’t think it will happen to you? Or maybe
you don’t believe it is a thing? See this Article
to see how just this sort of thing happen in 2015. This is where a Personal
Umbrella comes in.

A personal umbrella provides Liability protection in addition to the
underlying policy, in increments of $1 million. So, if you have bodily injury
limits of $250,000 per person and $500,000 per occurrence, a $1 million
umbrella policy would increase those limits to $1,250,000/$1,500,000. Rule of
thumb is that your Umbrella Policy should offer enough protection to cover your
net worth plus future earning potential. When determining the Price per $1000
in coverage there is no better value offered in the insurance market. Need help
determining your overall risk? A skilled agent should be able to assist you in
estimating this number, but should you need help, the trained agents at
Customers First are here to assist you. Just give us a call or complete the Contact us form.

Michael Vereecke, CLCS
Michael Vereecke, CLCS

President/Agent @ Customers First Insurance Group
586-221-6870

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