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Frequently Asked Questions

Below are some of our frequently asked questions. If you have any other questions or concerns, please feel free to contact us.

  1. Why is auto insurance so expensive in Michigan?
  2. What is the MCCA fee on my auto insurance policy?
  3. Do I need to buy insurance for rental cars?
  4. What is a deductible on home insurance?
  5. I rent my home but have a homeowners policy. Is this a problem?
  6. What is General Liability insurance?
  7. What is business Workers Compensation insurance?
  8. Do I need an Umbrella policy?
Why is auto insurance so expensive in Michigan?
Michigan has the most generous auto insurance benefits in the country, with unlimited medical/Personal Injury Protection (PIP) benefits for auto accident injuries. All vehicles are required to carry these unlimited benefits before a vehicle can be registered. It is this PIP coverage along with the state's required per-vehicle MCCA fee that make up a significant part of the cost of auto insurance in Michigan.

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What is the MCCA fee on my auto insurance policy?
MCCA is the Michigan Catastrophic Claims Authority. Very large dollar medical claims are paid out of this fund, regardless of the insurance carrier who originally issued the policy. The fee is assessed by the MCCA to insurance companies, who then charge that fee to their policyholders. The amount of the fee is changed in July of each year-- it is currently around $200/car annually.

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Do I need to buy insurance for rental cars?
Personal auto policies generally give you the same coverage for a rental car as what you have on your auto policy. If you have full coverage on your auto policy, you typically get that same coverage on a rental car. However, rental car companies can charge fees that your auto policy likely may not cover-- like diminished value or loss of use. Also, your policy will not cover larger vehicles like small moving trucks, so the safe answer is to buy the insurance, but if you don't, be sure to talk with your agent.

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What is a deductible on home insurance?
The deductible is the amount that you have to pay first, before your insurance company will begin to pay. Homeowners deductibles often start around $500 to $1,000, but can obviously go higher, or you might have separate deductibles or percentage deductibles for perils like wind or hail. Increasing your deductible can be a good way to save on premium-- the higher the deductible, the lower the price.

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I rent my home but have a homeowners policy. Is this a problem?
It is a big problem. Homeowners policies REQUIRE that you be the owner and occupant of your home. If you have tenants living in a home, or have moved out and the home is vacant, the insurance carrier can easily deny coverage if you have a claim because you are no longer occupying the home. Homeowners policies might be a little cheaper than a landlord/rental policy, but it is not worth the risk of having no coverage when you need it the most.

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What is General Liability insurance?
General liability insurance is purchased by businesses to protect others from bodily injury or property damage that might accidentally occur because of the business's activities. A builder could accidentally drop a ladder on a homeowner, or start a fire while working at a job site-- general liability would pay for legal defense and damages as a result of their operations. Any business should carry this insurance, from stores to contractors, or churches to restaurants-- along with exploring other types of business insurance policies.

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What is business Workers Compensation insurance?
Workers Compensation insurance covers an employer for workplace injuries that their employees might have on the job. It covers medical costs plus lost wages, based on state guidelines. In general, anyone with employees should carry Workers Compensation. Also simply calling someone an "independent contractor" does not protect a business from liability if someone gets injured, or exempt them from the Workers Compensation laws, so be sure to talk with an agent.

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Do I need an Umbrella policy?
Obviously it never hurts to have a personal umbrella policy. Umbrella policies provide excess coverage over underlying personal policies such as auto, home, boat, or rental dwellings. The limit of coverage on an umbrella stacks on top of your underlying policies. The basic rule of thumb is to look at your assets and be sure to have total liability limits in excess of that. Personal umbrellas do not include business exposures, and always have exclusions and limitations, so you'd want to consult your trust attorney or agent with questions.

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