We see this all the time: smart people with good policies still get caught off guard by myths. It’s not your fault—insurance is confusing, and there’s a lot of half-true advice out there. Let’s clear up the big ones we hear in Michigan and show what to do next.
Myth #1: “I have full coverage, so I’m covered for everything.”
What’s really going on: “Full coverage” isn’t a coverage. It’s slang for liability + comprehensive + collision on auto. It says nothing about rental reimbursement, roadside, uninsured motorist, glass, or your deductibles. On home, there is no such thing as “full coverage.”
Real example: A driver had comp/collision but no rental coverage. After a not-at-fault crash, they paid $700 out-of-pocket for a rental while the claim processed. Rental reimbursement is usually $2–$8/month.
What to do: Ask your agent to list every coverage you do and don’t have—on one page.
Myth #2: “If my friend borrows my car and crashes, their insurance pays.”
What’s really going on: In Michigan, insurance generally follows the car first. Your policy is primary if you gave permission.
Real example: Your friend rear-ends someone in your car. Your collision deductible and rates are impacted, not theirs. A $2,800 repair with a $500 deductible is your out-of-pocket. Your friend’s policy might help if limits are exhausted, but you’re on the hook first.
What to do: Set ground rules. If someone borrows your car, understand your policy and deductibles.
Myth #3: “No-fault means I can’t be sued.”
What’s really going on: Michigan’s no-fault system pays your own medical through PIP. But you can still be sued for injuries if thresholds are met, and you can be responsible for the other driver’s vehicle damage under Michigan’s “mini-tort” up to $3,000.
Real example: You slide on black ice and tap someone’s bumper. They send you a $1,100 mini-tort bill. If you only carry state-minimum liability and no collision, you could still owe that out-of-pocket.
What to do: Carry adequate bodily injury liability and property damage limits. Consider an umbrella policy. And remember mini-tort is real.
Myth #4: “Water in my basement is covered.”
What’s really going on: Most home policies exclude flood and ground seepage. Sewer/sump backups require a specific water backup endorsement with a set limit.
Real example: Heavy rain, sump pump dies, 4 inches of water. Cleanup and drywall: $8,400. Client had $10,000 water backup—covered. Next-door neighbor had zero—paid it all out-of-pocket.
What to do: Add water backup coverage. Typical cost is $50–$150/year depending on limit.
Myth #5: “My home insurance covers my jewelry and collectibles fully.”
What’s really going on: Policies cap theft for jewelry—often $1,500 total. Similar sublimits exist for firearms, silverware, cash, and sometimes bikes.
Real example: Engagement ring lost at the cider mill, $6,200. Policy paid $1,500. Scheduling the ring would have cost about $60/year and covered mysterious disappearance with no deductible.
What to do: Make a list of high-value items. Ask to schedule them.
Myth #6: “My personal auto covers me if I deliver for DoorDash or drive for Uber.”
What’s really going on: Personal policies exclude “livery” (driving for a fee). You need a rideshare/delivery endorsement or commercial policy.
Real example: Minor fender bender while delivering pizza. Claim denied under personal policy. Out-of-pocket: $3,400.
What to do: Tell your agent how you use your vehicle. Rideshare add-ons can be $10–$25/month.
Myth #7: “Windshield replacement is free in Michigan.”
What’s really going on: Michigan is not a “zero deductible glass” state by default. If you have comp with a deductible, you’ll pay that unless you buy full glass coverage.
Real example: Windshield with ADAS recalibration: $900–$1,300. Full glass add-on can be $5–$12/month, often $0 deductible.
What to do: If you drive highways a lot, consider full glass.
Myth #8: “If a pipe bursts, my finished basement is rebuilt to match.”
What’s really going on: Some policies settle older roofs and certain surfaces at actual cash value (ACV). Some limit coverage for basements, flooring types, or code upgrades.
Real example: 18-year-old roof with wind damage. ACV settlement was $4,100 less than replacement cost. Homeowner expected full replacement.
What to do: Ask how your roof and finishes are settled: ACV or replacement cost? Any cosmetic or matching limits?
Myth #9: “Flood insurance is only for coastal states.”
What’s really going on: Flood is water rising from outside. In Michigan, heavy storms, rivers, and lake-effect rain can flood basements. It’s never covered by a standard home policy.
Real example: Southeast Michigan storm. Overland water entered a walkout basement. Damage: $24,000. No flood policy—no coverage.
What to do: If you have any chance of surface water entering, get a flood quote. NFIP and private options exist. Often $400–$900/year outside high-risk zones.
Myth #10: “Umbrella insurance is for the ultra-wealthy.”
What’s really going on: Umbrella adds $1M+ of liability on top of auto/home for about $150–$300/year.
Real example: Dog bite claim with reconstructive surgery: $410,000. Without umbrella, assets and future wages at risk.
What to do: If you own a home, have a teen driver, dog, pool, rental, or volunteer/coach—get an umbrella quote.
Michigan-specific quick hits:
- PIP isn’t “one size fits all.” Unlimited vs $500k vs $250k changes premium and risk. The MCCA fee applies differently based on your choice.
- Mini-tort up to $3,000 still applies in Michigan.
- Winter claims (ice dams, frozen pipes) and spring storms make water backup and roof settlement details critical.
Final thought:
This is one of those things that is better to understand before there’s a claim. Policy language and carrier rules do vary. A 15-minute review can save you thousands.
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