It’s normal to drive our kids — and their friends — to school, sports, church, and activities. We rarely stop to think about what happens if we’re in an accident and those kids are injured. But of course, we’d want them taken care of.
Michigan’s auto insurance laws address this situation.
Your auto policy provides Personal Injury Protection (PIP) for you and your resident relatives. Likewise, your child’s friends are normally covered for auto-accident medical bills under their own parents’ auto policy.
Ideally, everyone involved has Unlimited PIP coverage, and medical bills are covered to the fullest extent of our state’s generous PIP laws. But that’s becoming less common.
Some families choose lower PIP limits (like $500,000). Others opt out of PIP medical coverage and rely on health insurance instead — sometimes learning too late how expensive that decision can be. And in some cases, a parent’s auto policy may have lapsed entirely.
When a passenger’s medical bills aren’t fully covered, the driver can be sued for the unpaid costs.
That’s where your auto policy’s Liability Coverage comes in. Unlike PIP, Liability Coverage is not unlimited. It has:
- a per-person limit, and
- a per-accident limit (often double the per-person amount).
If multiple kids are injured, those limits can be reached quickly. Once they’re exhausted, you could be personally responsible for the rest.
An Umbrella Policy helps here. It provides additional liability protection on a per-accident basis, after your auto limits are used up. Umbrella limits aren’t unlimited either — but they can make a critical difference when several people are injured in one accident.
If a passenger has no access to PIP coverage (their parent’s auto policy lapsed) the Michigan Assigned Claims Plan may provide up to $250,000 in PIP benefits. If medical costs exceed that amount, a lawsuit is still possible.
If you regularly drive other people’s kids, have a good conversation with your auto insurance agent about your liability limits and whether an umbrella policy makes sense — so a bad day doesn’t turn into an out-of-pocket financial disaster!
