The most common auto insurance denials come from the optional coverages available under our no-fault auto policy. In Michigan we are required to carry liability and personal injury protection (PIP) insurance on all vehicles and disclose all drivers that live in the household. However, we are NOT required to carry physical damage coverage on our vehicles. It is up to each individual (and their lender) to choose if they would like to insure their vehicles for comprehensive and collision damage, from there you may choose to include rental car coverage, OEM parts, car seat replacement, as well as many other options.
The other area we see coverage denials are with young adults that are still insured on their parent’s auto policies when they no longer in their home. If a child does not reside with their parents, it is imperative that they have their own auto policy. In most circumstances children away at school are still covered as long as their permanent residence is with their parents (they move in and out of a dorm/apartment back into parent’s residence, come home on holiday breaks, etc.).
It is important to be transparent about the status of young adults in your home. In addition to possible denials or gaps in coverage, your young adult may qualify for discounts and credits on your auto policy!