Michigan’s car insurance system can be confusing, especially when it comes to residual bodily injury (RBI). This article aims to demystify RBI and its unique role in the state’s no-fault framework.
What is Residual Bodily Injury?
RBI is a type of car insurance coverage that kicks in after your personal injury protection (PIP) benefits have been exhausted. PIP, mandatory in Michigan, covers medical expenses incurred by you and covered individuals involved in an accident.
Why is it Complicated in Michigan?
Michigan’s unique feature lies in its “default” coverage. While the state minimum is $50,000 per person and $100,000 per accident for residual bodily injury, the recommended coverage is significantly higher at $250,000/$500,000. This “default” means that unless you specifically sign that you want lower limits during each policy renewal, your coverage may automatically revert to the defaults.
Key Points to Consider:
- Trade-off between cost and protection: The cost difference between minimum and recommended coverage is typically small, while the protection offered by the higher limits is substantial.
- Long-term liability: Even if you caused an accident years ago, you can still be held liable for exceeding medical costs beyond the coverage limits at the time of the accident.
- Out-of-state drivers: If you cause an accident in Michigan while being a resident of another state without PIP coverage, your RBI coverage will be responsible for the other party’s medical expenses exceeding the PIP limits.
Making Informed Decisions:
- Consult a qualified insurance agent to discuss your specific needs and risk tolerance.
- Carefully review your policy renewal documents and actively choose the desired coverage level (recommended coverage is strongly advised).
- Consider an umbrella policy for additional protection beyond standard limits.
Remember: While Michigan is a no-fault state, RBI plays a crucial role in ensuring financial security in case you are responsible for an accident exceeding PIP limits and causing significant injuries to others. By understanding this unique system and making informed choices, you can safeguard yourself from potential financial hardships in the future.
Disclaimer: This information is for general educational purposes only and should not be taken as financial or legal advice. Always consult with a qualified professional before making any decisions about your car insurance coverage.
