The auto insurance industry took notice of a recent change in Michigan Law that took place in July 2020. This change in the law now makes it possible to be sued for “excess” medical expenses in the event of an accident. What this means for all licensed drivers is that your regular auto insurance may not be able to cover these “excess” medical expenses, even at the highest coverage limits. In cases like this, it’s wise to carry umbrella insurance, and we will cover the reasons why below. High Favor Insurance in Birmingham, MI offers umbrella insurance and other insurance coverages for your needs.
Umbrella Insurance is “extra” insurance that covers any amounts that are above and beyond your regular insurance coverage limits. This type of insurance comes into play when your regular insurance limit is exhausted due to excessive claims from an event. We will cover how this breaks down below.
Without Umbrella Insurance
Let’s say that you end up in an accident, and you are found liable for $500,000 in pain and suffering for the other driver. Your liability coverage limit in your auto insurance policy is only $300,000 which leaves $200,000 unaccounted for. This means that you’ll have to pay the $200,000 amount out of pocket to satisfy the insurance claim.
With Umbrella Insurance
Under this same scenario of being liable for $500,000 in pain and suffering, you have your $300,000 of liability coverage under your regular auto insurance policy. You also carry $1,000,000 of umbrella insurance for the possibility of a situation such as this one. Your $200,000 amount that you would have normally had to pay out-of-pocket for in the scenario above, would be paid by the umbrella insurance policy instead of in this particular instance.
To Learn More
You can learn more about umbrella insurance by contacting High Favor Insurance in Birmingham, MI today!