Insurance Types – No-Fault, Personal Injury Protection, Property Protection Insurance, and Residual

Sep 15th, 2010 | By Hot News Reporter | Category: Insurance Today

Michigan requires the residents who own car to buy the no fault insurance. There are several types of no fault car insurance including personal injury protection (PIP), property protection insurance (PPI), and residual liability insurance.

The personal injury protection (PIP) will pay for the medical cost of the policy holder. If you are not injured, it will pay the maximum compensation including your lost salary for 3 years. In the event that you die in the accident, the insurance company will disburse a monthly allowance to your beneficiaries for up to 3 tears. The monthly allowance is based on the earnings. Each policy holder is entitled to receive compensation of $20 for replacement service. The replacement service compensation is used to pay services such as yard work, maid, which you are not able to pay by yourself because you are not fit to work. The PIP coverage can be coordinated with the majority of the health policies. However, you cannot coordinate the PIP coverage with the government insurance bodies such as Medicaid, and Medicare. If you coordinate the PIP coverage with the health policy, the health policy is the main payer while the auto policy will pay for the balance medical expenses. The coverage for the remaining medical cost is called excess medical loss.

The property protection insurance (PPI) offers compensation for the damages your car done to the property that belonged to other people. For example, PPI insurance will pay for the damages if your car accidentally collides into the buildings or fence. If your car collided into a parked vehicle, the PPI insurance will also pay for the damages. The PPI insurance covers up to $1 million dollar.

The residual liability insurance covers the lawyer fee if you are sued by a third party due to a car accident. The residual liability insurance is also called bodily injury and property damage (BI/PD). It will pay for the lawsuit fee if you are sued for causing someone to die in an accident or involved in another state. In addition, you are entitled for the compensation if the third party is a non resident. It also covers up to $5000 for the damages you have incurred on another car during an accident. The coverage will only apply if you are the one that is responsible for causing the damages.  The no fault policy will compensate for the limit amounts in the event that a third party sue you for causing damages to him in the accident.

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