Michigan Auto Insurance: Understanding Trailer Coverage

If you're towing a trailer in Michigan, you might be wondering if your auto insurance covers it. Well, it depends. Most auto insurance policies will provide liability coverage for a trailer if it's being pulled by the insured vehicle when an accident occurs. However, this coverage usually extends only to third-party liability and not damage to the trailer itself. For comprehensive and collision coverage on a trailer, separate insurance is often required.

In Michigan, specifically, the requirement for trailer insurance depends on the type of trailer. According to the Michigan Insurance Code (MCL 500.3101), a motor vehicle is defined as a vehicle with more than two wheels, and all motor vehicles must be covered by a No-Fault policy. So, if you're towing a trailer with more than two wheels, you are required by law to have insurance for it. On the other hand, if your trailer only has two wheels, insurance is not legally required, but it's still recommended.

Michigan auto insurance and trailer types

Michigan auto insurance requirements for trailers vary depending on the type of trailer and its usage. Here is a detailed overview of the different types of trailers and the insurance requirements in Michigan:

Travel Trailers

Travel trailers typically require separate insurance policies similar to RV insurance. This type of coverage includes physical damage protection while the trailer is parked and liability coverage while it is being towed. If you own a travel trailer, it is recommended to consult with an insurance agent to ensure you have the appropriate coverage.

Boat Trailers

Boat trailers may require additional coverage beyond standard auto insurance due to their unique risks, such as water damage and corrosion. It is essential to review your policy or consult with your insurance provider to ensure adequate coverage for boat trailers.

Commercial Trailers

Commercial trailers used for business purposes require commercial trailer insurance, which offers higher liability limits and covers a wider range of scenarios. Commercial trailer insurance is designed to protect against the increased risks associated with commercial use. This type of insurance is necessary if you transport goods or provide services using your trailer.

Utility Trailers

Utility trailers are commonly used for hauling equipment, debris, or recreational vehicles. They may not be covered under a standard auto insurance policy when detached from the towing vehicle. As a result, a separate insurance policy specifically for the trailer may be necessary. This type of policy can cover theft, vandalism, and accident-related damages. It is important to review your current coverage and consider any additional protection you may need for a utility trailer.

Conventional Trailers and Cargo Haulers

Conventional trailers and cargo or utility haulers are often covered under your car insurance policy. However, it is always a good idea to check with your insurance provider to confirm.

Trailer Insurance Requirements in Michigan

In Michigan, the insurance requirements for trailers depend on the number of wheels. According to Michigan's No-Fault Law, a "motor vehicle" includes a trailer with more than two wheels. Therefore, trailers with three or more wheels must be insured under a No-Fault policy. On the other hand, trailers with two wheels or fewer are not legally required to have insurance. However, even if not mandatory, it is still recommended to insure your trailer, regardless of the number of wheels, to protect yourself from potential liabilities and damages.

Michigan auto insurance and liability

Michigan is a no-fault state, which means that your insurance company will pay for your injuries or property damage after an accident regardless of who is at fault. Motorists are required to carry no-fault insurance to help cover injuries and damages without the need to determine fault in an accident.

Michigan car insurance law requires vehicle owners to carry No-Fault auto insurance that covers personal injuries, property damage, and liability for bodily injury. These coverages help pay for medical bills and lost wages, and legal liability if a driver injures another person or causes damage to property.

Personal Injury Protection (PIP)

If you are seriously injured in an auto accident, No-Fault PIP benefits provide reimbursement for medical expenses, a percentage of your lost wages, attendant care (in-home nursing services), and replacement services (help with household duties).

Property Protection Insurance (PPI)

This coverage is for damage caused by you to “tangible property” such as parked cars or other property (e.g. buildings, fences, trees, lawns, etc.) within the state of Michigan. Every Michigan auto policy has a mandatory $1 million of PPI coverage.

Residual Bodily Injury Liability (BI)

This coverage protects you if you cause an auto accident that results in serious injuries to someone else. The law requires a minimum of $250,000 per person and $500,000 per accident in bodily injury liability coverage, but drivers may choose to purchase lower limits of $50,000 and $100,000. However, attorneys recommend carrying at least $500,000 per person and $1,000,000 per accident to be fully protected.

Property Damage (PD)

This coverage protects you if you cause damage to another person’s vehicle outside the state of Michigan. The Michigan car insurance law requires a minimum of $10,000 of PD coverage, but attorneys recommend carrying a minimum of $100,000.

Minimum Coverage Requirements

In Michigan, to legally operate a vehicle, drivers must have minimum coverage auto insurance. The required minimum amounts are:

• $50,000 for bodily injury liability per person
• $100,000 for bodily injury liability per accident
• $10,000 for property damage liability per accident
• Unlimited personal injury protection (PIP) per person

Michigan auto insurance and collision coverage

In Michigan, collision insurance is an optional coverage that helps pay for repair costs for accident-related vehicle damage. It is not mandatory, but it is recommended as it provides a certain and comprehensive way of paying for vehicle damage. Without collision insurance, a vehicle owner has little recourse to pursue repair costs.

Michigan's No-Fault Law has essentially "abolished" the "at-fault" driver's liability for damages to a motor vehicle. Therefore, the other driver who caused the accident does not pay for the vehicle damage. Instead, your own car insurance company will pay for the vehicle damage, but only if you purchased collision coverage.

There are three types of collision coverage in Michigan: broad form, standard, and limited. Here's how they differ:

Broad Form Collision Coverage

• Pays for collision damage to the insured vehicle regardless of fault.
• The deductible is waived if the operator of the vehicle is not substantially at fault (50% or less at fault) in the accident.
• If the operator is found to be more than 50% at fault, the deductible must be paid before benefits are provided.

Standard Collision Coverage

• Pays for collision damage to the insured vehicle, regardless of fault.
• However, if the operator is found to be more than 50% at fault, the deductible must be paid, even if they were not at fault.

Limited Collision Coverage

There are two types of limited collision coverage: with a deductible and without a deductible.

Limited Collision Coverage Without a Deductible

• Pays for collision damage to the insured vehicle when the operator is not substantially at fault (50% or less at fault).
• If the operator is found to be more than 50% at fault, limited collision coverage provides no benefits or coverage.

Limited Collision Coverage With a Deductible

• The owner of the damaged vehicle must pay a deductible before receiving benefits, even if the operator was not at fault in causing the accident.
• If the operator is found to be more than 50% at fault, limited collision coverage provides no benefits or coverage.

It is important to note that collision coverage typically does not extend to trailers being towed. Separate coverage may be required for trailers, and it is recommended to consult with an insurance provider to understand the specifics of your policy.

Michigan auto insurance and comprehensive coverage

Michigan auto insurance is a comprehensive package designed to protect drivers in the event of accidents, property damage, and other unforeseen circumstances. While the state mandates certain minimum coverage requirements, comprehensive coverage is an optional add-on that offers enhanced protection for vehicle owners.

Comprehensive coverage is an optional type of auto insurance in Michigan that provides financial security against non-collision incidents. It covers damage to your vehicle resulting from events such as theft, fire, vandalism, glass breakage, and contact with animals. This type of insurance is ideal for those seeking protection beyond what is offered by collision coverage, which only applies to collision-related incidents.

The cost of comprehensive coverage can vary depending on factors such as the age and value of your vehicle, as well as your driving record and history. It is generally recommended for drivers who want peace of mind and wish to protect their investment in their vehicle.

In addition to comprehensive coverage, Michigan drivers can also opt for other types of optional coverage, including collision coverage, uninsured/underinsured motorist coverage, personal injury protection, and property damage liability. These additional coverages can provide enhanced protection in the event of accidents, property damage, and injuries to yourself or others.

It is important to note that while comprehensive coverage is not mandatory in Michigan, certain situations may require you to obtain it. For example, if you lease or finance your vehicle, lenders may require you to carry both collision and comprehensive insurance to protect their investment.

When considering comprehensive coverage for your vehicle in Michigan, it is always a good idea to consult with a knowledgeable insurance agent. They can help you navigate the specific requirements, options, and costs associated with auto insurance in the state, ensuring that you have the protection you need while staying compliant with the law.

Michigan auto insurance and contents coverage

Michigan auto insurance provides coverage for personal injury and property damage. This includes damage to other vehicles, buildings, fences, and lawns. Michigan auto insurance also covers bodily injury and provides reimbursement for medical expenses, lost wages, and essential services.

In terms of contents coverage, Michigan auto insurance does not typically cover personal items within a vehicle. However, separate insurance policies can be purchased for items such as boats, dirt bikes, ATVs, and other off-road vehicles. Additionally, contents coverage can be added to a policy as optional coverage to protect the contents or cargo within a trailer.

Michigan auto insurance also offers comprehensive coverage, which includes protection against theft, fire, glass damage, and vandalism. This type of coverage can be useful for repairing vehicles damaged by non-collision incidents, subject to a deductible.

It is important to note that Michigan auto insurance does not cover damage to a trailer itself in most cases. Separate trailer insurance or a specialized recreational vehicle policy may be required for this. However, liability coverage under Michigan auto insurance may extend to damage caused by a trailer while towing, depending on the specific policy and state regulations.

Frequently asked questions