Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides coverage for liability, medical, and physical damage to your car:
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Personal injury protection pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses as a result of an auto accident.
- Physical damage (Comprehensive and/or Collision) coverage pays for damage to or theft of your car.
Liability and personal injury (medical) coverages are required by law in Michigan. Physical damage coverage to your auto is optional. If you are financing your car, the financial institution usually requires that coverage.