Not every state requires auto insurance, but they do all require financial responsibility if you have been involved in car accident. However, auto insurance provides something of a safety net. So even if you drive a beater, owning auto insurance benefits you and everyone around you.
As long as the individual driving your car has your permission, any physical damage caused by that person is covered. Unless the driver has his or her own auto insurance, bodily injury is not covered. Other exclusions exist depending on the type of policy you own. Talk with your agent to find out what your policy covers.
Each vehicle contains a symbol ranging from 4 to 30 — the higher the symbol, the more expensive the insurance. The symbols are determined using different things, including, but not limited to; safety features, frame, horsepower, availability of parts, cost to fix, etc. For instance, sports cars tend to be driven more recklessly than conservative cars, increasing the likelihood of crashes. Based on this research surrounding sports cars, insurance carriers may heighten their insurance costs.
Before totaling a car, insurance companies take into account repair costs, market value, and salvage value. Though it varies by insurer, most insurance companies total a car if the cost of repairing it and salvaging it exceed the market value of the car. Some insurance companies total the car if repair costs exceed a certain percentage of the car’s value, which can be anywhere between 51 and 80 percent.
People who have a license but do not drive regularly should consider non-owner auto insurance. Though less common than typical auto insurance, many companies still offer non-owner coverage. Non-owner insurance is not comprehensive, and typically covers any injuries or property damage you cause.
Michigan uses no-fault auto insurance, which provides residents with personal injury protection (PIP). Because of this, Michigan’s insurance premiums are higher. Though no-fault insurance costs more, it significantly decreases the amount of lawsuits filed by unhappy car owners. No matter who causes an accident, no-fault auto insurance requires that each driver’s policy pay for any physical damage. Work with your insurance provider to understand how your no-fault insurance affects you.
Michigan road users must meet these minimum requirements:
Even though you have no control of your age and gender, you do have control over other things that influence your auto insurance rate. Insurance companies want to see you act responsibly, so avoiding accidents, claims, and traffic violations will keep your insurance at a reasonable level. Additionally, taking a course in defensive driving will decrease the cost of insurance for younger drivers. On top of that, you also have the ability to choose what kind of coverage you want, including limited, standard, or broad collision coverage in the state of Michigan.
Your zip code tells insurance companies a lot more than you would expect: how many people live near you, the amount of traffic on your streets, how much crime affects your area. If more vehicles drive on the roads where you live, chances of an accident dramatically increase. Likewise, the chance that your car will be vandalized increases in high-crime areas. In addition to using your zip code, insurance companies also evaluate risk based on how many policyholders they have in an area and other variables that differ from company to company.
Paying a higher deductible lowers the premium cost of your insurance, which may save you money over time. On the other hand, paying a lower deductible increases the premium cost. If you choose to pay a lower deductible, you pay significantly less if you have to file a claim at some point in the future. Both routes have their benefits, so talk with your insurance provider to figure out what kind of deductible is right for you.
The information provided here relates to general situations and questions concerning specific risks and may not apply to all situations or individual circumstances. Traverse City Insurance does not issue insurance contracts or bind coverage. We do not endorse or recommend any companies or insurance policies, and we do not provide insurance, tax or financial advice.