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IPS / Lighthouse Insurance Group Blog: michigan car insurance

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Excluded DriverEveryone knows “that guy” whom you wouldn't trust behind the wheel of your car, even in a matter of life and death. For the truly unfortunate, “that guy” is a member of your household—and looks not only to your vehicles as a source of transportation but also to your auto insurance as a source for coverage.

Personal auto policies can be extremely broad, extending coverage for not only members of your household but others while using your auto with your permission. The broad nature of the policy is excellent from a coverage perspective, seeing as driving other cars is an accepted habit in our society.

A common course of action is for the auto insurance company to pay the claim if the person driving the car at the time of the accident is you, your spouse, family member, or a permitted user. The company will then adjust your policy to reflect for the increased risk of damage or worse, issue a notice of non-renewal. The latter makes it more difficult to obtain comparable auto insurance from another company. 

Over time, many auto insurance companies have attempted to put the kibosh on the driver free-for-all, creating specific amendments, typically called exclusions, to policies that eliminate coverage for specifically named people. These exclusions are placed on policies by companies that determine—through information you provide and general driver information—that a person with access to your vehicle is too risky.

So what kind of red flags do insurance companies notice? In most personal policies, exclusions are designed for people with lousy driving records or who have been convicted of certain traffic-related crimes, such as DUI. Some companies have even drafted exclusions intended to eliminate coverage in cases where an insured person knowing allowed someone with a suspended license drive the car. Others have gone as far as to try to limit coverage to apply only to accidents caused by drivers who are licensed—a scary thought for parents of teens who are cruising nervously around parking lots learning manual transmission.

Other exclusions seek to remove coverage for damage to the vehicle itself caused by a collision while continuing to extend ever-important liability coverage for injuries or damage to a third party.

As stated earlier, the good news is that most personal auto policies will apply to the persons specifically named on the policy, their family members and others using with permission if involved in an accident. However, the fact that such exclusions are available should remind you of the importance of reviewing your policy with your Trusted Choice® insurance professional before letting someone else drive your car. You don’t want to end up paying damages out-of-pocket. 

INSURANCE PLANNING SERVICE is Livonia's Trusted Choice agency.  Call us today at 800-220-5582 or contact us online.  We would be happy to review your auto or homeowner insurance.


The Michigan Catastrophic Claims Association (the MCCA) assessment to insurance companies will be $186.00 per insured vehicle effective July 1, 2013 to June 30, 2014.  This is an increase of $11.00 per insured vehicle (a little more than 6%) over the previous year and will be reflected in the cost of auto insurance on policies with an effective or renewal date of July 1, 2013 and later.

The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1978. Michigan's unique auto insurance no-fault law provides unlimited lifetime coverage for medical expenses which result from auto accidents. The MCCA reimburses auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim paid in excess of a set amount. Currently that amount is $500,000. That means that the insurance company pays the entire claim, but is reimbursed by the MCCA for medical costs over $500,000.

A proposal is currently under consideration in the legislature to reduce auto insurance premiums by making significant changes to Michigan's no-fault law.  The proposal includes a $1 million cap on medical expenses in lieu of the current unlimited lifetime medical coverage.  Other components of the proposed reform to Michigan's no-fault auto insurance system include establishing:

  • Cost controls for medical expenses that would prevent health care providers from collecting higher fees from auto insurance comanies than those paid by other health insurance carriers or workers compensation
  • A state authority to fight auto insurance fraud

If passed, it is estimated that these changes will result in an annual premium savings of approximately $125.00 per insured vehicle.

Insurance Planning Service is an independent insurance agency offering a full range of insurance products – auto – home – business – life – health – to individuals, families and businesses throughout Michigan.  Call us at 800-220-5582 or contact us today for a quote on your insurance!


Auto PolicyThere are over 240 million registered motor vehicles in the U.S., according to the Census Bureau. At a given time, as many as a third of those clutter American roadways, and it is estimated that one-fourth of those are being used in the course of work.

Running errands, making deliveries, visiting customers. Even for those whose employment is not based on driving, it’s fair to say that your vehicle is an essential part of your employment. This presents an important question: If you are involved in an accident in the course of employment, are you covered by your Personal Auto insurance Policy (PAP)?

Like most insurance questions, the answer depends on circumstance. For example, what kind of car are you driving? Does the car belong to you or someone else? What type of business are you in?

Consider the language found in the typical PAP. At a glance, many policyholders are shocked to see that the PAP appears to exclude coverage for the use of any vehicle in the course of business other than farming or ranching. However, a very broad exception to this exclusion allows coverage for the business use of a vehicle provided it is one of three types: 1) a private passenger auto, 2) a pickup or van, or 3) trailer while used with the aforementioned. This exception suggests that as long as the vehicle is one of these three types, coverage remains intact after the accident.

But policyholders should proceed with caution, since some PAPs are not as generous. For example, some versions may be more restrictive towards pickups or vans, possibly including a gross vehicle weight (GVW) limitation or a clause that restricts coverage to owned pickups or vans only. Be sure to consult your policy before driving any pickup or van for work.

Further, policyholders should understand that any coverage permitted for business use of personal vehicles by the PAP is not intended for these three vehicle categories:

  • Commercial-type vehicles. The PAP restricts business use to private passenger autos, pickups and vans. While they can be purchased personally, box trucks, tractor trailers, shuttle busses and other commercial-type vehicles do not fit this description; such vehicles require a commercial auto policy.
  • Furnished or available for regular use. Often called the “company car” exclusion, this provision is dangerous and must be remedied if the exposure exists. The reason is that a typical PAP will exclude coverage for a vehicle that is regularly available to the policyholder but is not specifically insured under the PAP. For example, if you are furnished a company car as a benefit to your employment, make certain that you are covered by your employer’s auto insurance policy. If not, specific action is required to extend coverage under your PAP; it will not do so automatically. The good news is that this coverage change is usually inexpensive and can be done easily; just be sure to request the change now, before the accident happens. While the definition of furnished or available for regular use varies by case, err on the side of caution. Don’t assume that because you don’t take it home with you each night or that you only drive it occasionally you’re in the clear. Regardless, a vehicle owned by your employer could be considered available for your regular use. This exclusion presents a potential gap that is too risky to ignore; your Trusted Choice® agent can help you take the appropriate steps to close it.  
  • Vehicles that are the business. A PAP will not cover your vehicle if you use it to carry people for a fee, such as a taxi, limo or shuttle. The only exception is a share-the-expense car pool. And if you’re planning to make a few extra bucks delivering pizzas, auto parts, newspapers or other goods, proceed with caution. Many PAPs also remove coverage for vehicles that are used to deliver food or other types of property for a fee.

While in most cases the PAP will cover you for business use of a personal vehicle, there are situations where it will not. Such situations are not uncommon and, if not remedied, could result in significant financial detriment for you and your family. Consult your Trusted Choice® agent for advice on how to close potentially devastating gaps in your PAP today.

INSURANCE PLANNING SERVICE is a local Trusted Choice® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can contact us online or call at 800-220-5582 today!


Highway Traffic

Insurance companies love you for your wrinkles. But it's not only about your age. It's about the house you've bought, the spouse you have, and the bills you've paid.  That's why you're in the sweet spot for the best auto insurance rates from most companies if you're between the ages of 40 and 60, says Penny Gusner, consumer analyst for

"These drivers have usually settled down, have a family and drive responsibly, and are responsible with their finances," Gusner says.

A two-year analysis of nearly 200,000 quotes delivered through's online comparison engine showed that 16-year-olds saw an average rate of $4,075. By age 21, that average fell by half. And by age 50, it fell by half again.

Older drivers are more likely to be contending with slower reaction times behind the wheel and worsening eyesight. Those risks overcome greatly reduced mileage to result in rates that begin rising again after age 65.

The penalties of youth

Whether someone has settled down in life or can balance a checkbook may seem irrelevant when it comes to purchasing auto insurance. In fact, they're just two of a multitude of  when insurance companies set their rates.  Some factors are obvious. If your driving history is marred by a string of accidents and driving infractions, you can expect your rates to soar.

And age is a key consideration. "Younger drivers tend to take more risks," says Chris Hackett, director of personal lines policy for the Property Casualty Insurers Association of America. That can lead to younger drivers being involved in more accidents and receiving more traffic tickets.

But even with clean records, drivers who have been licensed less than three years tend to pay an "inexperienced operator surcharge," he says.

Though much depends on the insurance company, the penalty for inexperience usually disappears altogether by the time a driver has reached 25. But the drop doesn't come all at once.

For example, a major insurance company in California multiplies its base rate for liability coverage by 1.9 for newly licensed drivers -- effectively doubling the premium. That factor drops to 1.2 with five years' experience. At 10 years, the factor is .85 -- now, in effect, a discount off the basic rate.

Revenge of the minivan

"A younger driver is more apt to be distracted when they're driving. A 40-year-old is likely to be more cautious," says Lynne McChristian, a spokeswoman for the Insurance Information Institute.

That's borne out by auto accident statistics.  National Safety Council data show there were 211 million licensed drivers in the United States in 2009. Those who were age 19 and younger accounted for less than 5% of the licensed drivers but were involved in 8% of fatal crashes and 12% of all accidents. Drivers between the ages of 20 and 24 made up more than 8% of the licensed drivers, but were involved in 13% of fatal accidents and 15% of all accidents.

But there's much more to it than that.  Along with considering your age and experience when setting car insurance rates, your insurer looks at a host of other factors. If you have no black marks on your driving or claims histories, the biggest factor influencing your rates is usually your ZIP code.

More auto accidents are likely to occur in urban areas than rural ones, and even in the same city, auto thefts and auto break-ins may be more common in certain ZIP codes. All other things equal, the same driver in the same car may see rates differ by hundreds of dollars from one side of town to the other, and by thousands from state to state.

Unfortunately, younger drivers tend to prefer downtown to the suburbs.

Auto insurers in many states also look at your credit score. Those who exercise common sense with money are expected to exercise common sense behind the wheel, Hackett says.

Young drivers tend to have no credit or bad credit.

The type of vehicle you drive also plays a major role, Hackett says. If you own a BMW rather than a Camry, you are likely to face far higher rates.

And insurance rates for the same individual can vary greatly by company because each insurer uses its own statistical information on the various age groups it insures, Hackett says. The difference can be hundreds, even thousands of dollars.

Source:  Fox Business News
Photo source:  Fox Business News

1969 camaroThere comes a time in every driver’s life when he outgrows his current vehicle. It may be due to family additions that make the size of the current vehicle insufficient, it could be due to safety standards and technological advances, or it could simply be because the thrill of driving that particular model, is gone.

When you decide to get a new vehicle, you have two choices for the old. You can sell it privately, you can give it to a friend, family member or charity, or you can trade it in for a new model. No matter which option you choose, it's important that you maintain insurance coverage until the title is transferred.

The Gift

Once you've explored potential gift tax liabilities and charitable options and you've decided to give your vehicle away, you might think that it no longer needs insurance coverage. But if your car is damaged, stolen, or involved in an auto accident before the title is transferred to the recipient then you could be personally on the hook for the loss. Knowing in your mind that you intend to give the car away is not enough reason to cancel the insurance.

The Private Sale

When advertising for the private sale of your automobile, you may have many people who respond to the ad and wish to take your vehicle out for a test drive. You cannot rely on the fact that these individuals have insurance when they test drive your car; instead, you must make sure that you have sufficient auto insurance coverage to protect yourself from damages and liabilities while they test drive it. In addition, after they’ve paid you for the sale, it's still a good idea to maintain insurance coverage until you've taken the steps to transfer the title. That way, if the car is involved in an accident that results in a liability, you will not be responsible for paying for the damages.

The Trade-in

Even on the day you drive your car to the lot and arrange for the trade-in, you should ensure that you have proper insurance coverage. You could get into an accident on the way to the lot or even while at the lot, or your car could be damaged in another kind of insurable incident before the transaction is complete.

By maintaining insurance all the way until such time as the title is no longer in your name, you protect yourself thoroughly from liabilities and damages. For your free Michigan auto insurance policy review or to find out more about when it's appropriate to cancel a policy, give us a call at 800-220-5582.

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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake