Navigating Auto Insurance Reform Part 3: Understanding Bodily Injury (BI) Liability
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Navigating Auto Insurance Reform Part 3: Understanding Bodily Injury (BI) Liability

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saginaw bay underwriters AUTO INSURANCE

Michigan auto insurance looks very different now than it did before July 2, 2020. Auto insurance reform or “no-fault reform” impacts every driver in the state, including you. However, the topic can also be very confusing.

Saginaw Bay Underwriters created this helpful series of posts entitled “Navigating Auto Insurance Reform” to make what you need to know clear, so you can make informed insurance decisions for you and your family.

See “Navigating Auto Insurance Reform Part 1”

See “Navigating Auto Insurance Reform Part 2: Understanding Personal Injury Protection (PIP)”

In Part 3, we’ll explain how the reform impacts Bodily Injury (BI) liability and look at some things you may want to consider.

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Understanding Bodily Injury (BI) Liability

If you or someone covered by your auto insurance injures someone else in an accident and is at fault, your own Bodily Injury (BI) liability provides coverage for damages you’re found to be responsible for.

New BI Limits

Auto reform increased the minimum BI limits that you must carry to $50,000 per individual / $100,000 per accident / $10,000 property damage, from the previous minimum limits of $20,000 per individual / $40,000 per accident / $10,000 property damage.

It also created new default liability limits of $250,000 per individual / $500,000 per accident / $10,000 property damage. You may choose to purchase even higher BI limits.

If you wish to select liability limits less than the new default limits, you’ll be required to sign a form acknowledging the risks.

Greater Risk of Being Sued

Before July 2, 2020, if you injured someone in an auto accident and were found to be at fault, you could only be sued for pain and suffering. Now you have a much greater risk, as injured parties can sue for these additional items:

  • Uncovered medical care.
  • Uncovered home and auto modifications.
  • Uncovered attendant care.

Considerations Regarding BI

  • You may want to consider maintaining higher liability limits and uninsured/underinsured motorist limits. If you or someone covered by your insurance is at fault in an accident, there is now a much greater risk of being sued for significant damages, particularly if the injured person chose a lower Personal Injury Protection (PIP) limit.
  • You may want to consider a personal umbrella policy. An umbrella policy provides additional coverage beyond your auto liability limits.

Making the Complex Simple

Michigan auto insurance reform is a very important topic, but it can also be confusing.

In Part 4, we’ll use a scenario to look more closely at Personal Injury Protection (PIP) and some things you may want to consider.

For more information now, see “Michigan Auto Insurance Reform FAQ.”

Please subscribe to our blog to be notified of future posts. Call Saginaw Bay Underwriters at (989) 752-8600 if you’d like to speak with an advisor about your auto insurance.

Saginaw Bay Underwriters has made every attempt to ensure this information has been obtained from reliable sources. For specific language, please refer to your insurance policy, in addition to state statutes, laws and regulations. Current as of: July 2020.

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