Buyer Beware: Court Says Collision-Only Coverage is Not Enough

Do you have the right kind of auto insurance to cover the people injured in an accident? When insurance brokers get creative to save customers money, it can sometimes leave drivers confused about what they are buying. And as a recent Michigan Court of Appeals decision explains, that could leave you without personal injury protection when you need it most.

The 5 Types of Auto Insurance Coverage

When it comes time to buy car insurance, many buyers think one policy will give them “full coverage”. In fact, there are 5 different types of auto insurance coverage:

  • Personal injury protection (PIP) covers injuries to any people involved in the accident, including yourself.
  • Residual bodily liability insurance covers any liability you owe because of a car accident up to the policy limit, including serious injury of a passenger or other driver, or accidents that happen outside of Michigan.
  • Property protection covers the damage your car does to other people’s property up to the policy limits, including bicycles, fences, buildings, or guard rails.
  • Collision coverage pays for damage to your vehicle because of a car accident.
  • Comprehensive coverage pays for repair of your own vehicle when it is damaged other than in an auto accident, up to policy limits, including theft, vandalism, or natural disasters.

The Michigan No-Fault Act says that all drivers must get PIP coverage, property protection, and residual bodily liability insurance on any vehicle they intend to drive (on a road, at least). Under current Michigan law PIP coverage is unlimited, covering a person’s injuries no matter how much it costs. But the state mandatory coverages for the other types of insurance are far lower: $20,000 per person or $40,000 per accident in residual bodily liability coverage and $10,000 in property protection. The Michigan legislature has just approved a new bill that will change the law for mandatory no-fault insurance in the future. Look for future blog posts that explain the change.

You can choose to cover yourself more completely. There are optional insurance policies that raise the coverage limits on property protection, and residual bodily liability insurance. You may also choose to purchase collision coverage and comprehensive coverage to make sure there is money available to pay your bills after a car crash.

What if You Only Think You Have Full Coverage?

Knowing what coverage you have isn’t always easy. Sometimes auto insurance agents and brokers can present these policies together as “full coverage” or give you options to add policies or adjust limits. And that can sometimes cause you to think have more insurance than you do.

That’s what happened to Steven Vandeinse. In 2015, when he went to purchase a used Chevy Impala, he went to an insurance broker and asked for “full coverage.” The broker recommended buying his mandatory no-fault insurance coverage from one provider and other optional policies from another to get a better rate.

But then when the Impala struck and injured a bicyclist (he was a passenger at the time), Vandeinse discovered that he had accidentally purchased collision-only coverage through USA Underwriters. In the lawsuit that followed to cover the cyclist’s injuries, the insurance companies fought over who should have to pay the bills, and whether USA had tried to defraud Vandeinse by selling him collision-only coverage without a mandatory no-fault insurance policy.

In Johnson v USA Underwriters, the Michigan Court of Appeals said having the right insurance was the buyer’s responsibility. It ruled that Vandeinse had made a “mistake of law” when he purchased collision-only coverage, believing it would cover everything in an accident. That didn’t relieve him of his responsibilities under the Michigan No-Fault Act.

The court said, “USA’s policy is crystal clear that it included coverage for physical damage only and did not meet the requirements of the no-fault act.” It refused to require USA or any other insurance provider to add on no-fault benefits when the policy was for collision-only coverage.

Buyer Beware: Collision-Only Coverage is Not Enough

If Vandeinse had been behind the wheel in this accident, his collision-only coverage could have been an even bigger problem. If a driver is injured in an accident and doesn’t have no-fault auto insurance, he or she will not be entitled to any benefits to cover his injuries under the No-Fault Act. That’s why it is essential that buyers review their coverage carefully and be sure they have the policies they need to protect themselves in an accident.

The Macomb Law Group, is a personal injury law firm in Clinton Township, MI. Our attorneys can help you receive the benefits you need from auto insurance companies. If you or a loved one have been seriously injured, contact Macomb Law Group and get our team working for you.


  • James Spagnuolo

    I began working in personal injury law more than 20 years ago, starting as a law clerk during my first year of law school at Wayne State University School of Law in Detroit. After passing the bar exam in 2002, I went on to become a partner at a series of law firms before opening the Macomb Law Group in 2017.

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