No-Fault Insurance and other mistaken assumptions that could cost you everything

You look up, and your life flashes before your eyes. You hear the crumpling of metal, glass breaking, and then your airbag goes off in your face. Your head begins to clear and, as you look up, there is what appears to be steam or smoke coming from your car, people standing around. One comes to your window, asks if you're ok. "I think so," you mumble, unsure of what just happened. Then you glance over to the passenger side of the car and the screen of your cell phone catches your eye. It reads, Text message sent.

Texting while driving is a dangerous combination. If you glance at your phone for one second while driving at 55 m.p.h., you will have traveled 100 yards or the length of a football field. Scary? There's more. Statistics show that more than 50 percent of drivers age 16 to 24 send text messages while driving (note: that percent doesn't eliminate the other ages). The risk and prevalence of texting while driving is enormous-yet few people consider how it might affect their lives and assets.

Consider this: What if the driver in the situation in the beginning of this column wasn't you but one of your kids? Who is on your auto policy? What if a person in the other car were killed? Insurance is not just about what ifs. Insurance, if properly done, is asset protection. After an accident like the one above, the attorneys involved will ask you to fill out an Asset Interrogatory, which is a 54-question inquiry. They want to know details about your assets and financial affairs and with whom you share accounts. You might assume they're looking over all those investments in order to best cover your accident. You reason, I live in Michigan, and this is a no-fault state. So how can I be in trouble?

You can still be sued for four

major things in Michigan:

– Wrongful Death

– Disfigurement

– Impairment of Bodily Function

– Loss of Wages up to $4713.00 per


Translation: If you have checking accounts, savings accounts, investments, real estate, or any income or items you intend to retain and use to take care of your family and then retire, I would suggest you review your insurance policies.

It is amazing to me when I speak with clients who proudly speak about their relationship with their financial advisor or their banker, but when asked about their insurance agent say, "Well, I shopped around for the cheapest premium" or "I am with such and such company, but I don't know who my agent is."

My question to them is this: If you have assets, you have a financial advisor for your investments, you have a personal banker, and you have a relationship with both. But whom do you have that actually protects those assets? What are your coverage limits on your auto policy?

You may say you have liability insurance, but the bigger question is this: Do you have enough for the assets you have? Or did you just ask for low premiums and assume that because you have coverage, no one could take your assets?

Big mistake. There are areas on your auto policy that could bankrupt you, and all of them are pennies on the dollar to protect your assets.

Let's just look at one area of the policy your bodily injury limits. This limit is for damage you or someone on your policy causes to another individual with your vehicle. Using 100/300, a common policy limit that works out to be $100,000 per person and $300,000 per occurrence or accident, let's assume that following the texting accident noted above, you are sued for impairment of bodily function by four different people. They all sue for $125,000 a piece. Your insurance company writes a check to three people for $100,000 each. That would leave $200,000 unpaid.

Who would be responsible for that money? You. From where do you think that money would come? First, your savings. Then, your checking. Then your investments, perhaps next a garnish of your wages. The list could go on. So what do you do? The best offense is a good defense. Call your agent or set up a time to meet with an agent to review and explain what coverages you should have based on your assets. Find an agent you are comfortable with, build that relationship, and review your assets on a regular basis. Don't wait until an accident occurs to find out what you thought you had wasn't enough.

Go to for a video on texting while driving. Jeff Needham is a multi-line Farm Bureau Insurance Agent based in Traverse City 231.947.9452