We’ve always said that a personal umbrella policy was one of the best values in insurance, something that simply helps you sleep better at night. But in the last couple of years, the landscape in Michigan has shifted. Between a major Supreme Court ruling and changes to our No-Fault auto laws, the “target” on your personal assets has grown significantly larger.
If you’ve been on the fence about an umbrella, here is why the “wait and see” approach is becoming a dangerous game.
1. The Death of the “Open and Obvious” Defense
For over 20 years, Michigan property owners had a strong shield called the “Open and Obvious” doctrine. Essentially, if there was a hazard on your property—like a giant pothole or a clearly visible patch of ice—and a “reasonable person” should have seen it and avoided it, you weren’t liable if they tripped and hurt themselves.
That shield is gone.
In a landmark 2023 ruling (Kandil-Elsayed v. F&E Oil), the Michigan Supreme Court effectively overturned this precedent. Now, even if a hazard is glaringly obvious, a jury can still find you at fault for not fixing it. This means many slip-and-fall lawsuits that used to be dismissed early on are now heading straight to a jury. When cases go to a jury, the costs (and the potential payouts) skyrocket.
2. The No-Fault “Wild West”
For decades, Michigan’s No-Fault system meant that if you were in an accident, everyone’s own insurance paid their own medical bills—regardless of who was at fault. This kept a massive lid on lawsuits because there was no reason to sue for medical expenses that were already covered.
But with the recent No-Fault reforms, many people are now choosing limited PIP (Personal Injury Protection) or opting out entirely to save a few dollars on their premium.
Here is the catch: If you cause an accident and hit someone who chose a $250,000 medical limit, and their hospital bill is $600,000, they can now sue YOU for the $350,000 difference. Before the reform, that lawsuit wouldn’t have existed. Today, it’s becoming common. You are no longer just responsible for “pain and suffering”; you are now on the hook for someone else’s lifetime medical bills if they under-insured themselves.
3. A More Litigious “New Normal”
It’s no secret that we live in a litigious society. You can’t drive five miles in Grand Rapids without seeing a billboard for a personal injury attorney promising a huge payday. These firms are well aware of the “Open and Obvious” change and the new PIP gaps. They aren’t just looking for your insurance policy limits anymore—they are looking for the equity in your home, your savings accounts, and your future wages.
The Bottom Line
An umbrella policy is designed to sit on top of your home and auto insurance like a safety net. It picks up where those policies leave off.
In the “old days,” a $500,000 limit on your auto policy might have felt like plenty. In today’s Michigan, it can disappear in the blink of an eye after one bad afternoon on I-96 or one patch of ice on your sidewalk.
You can get $1,000,000 in extra protection for about the cost of a couple of pizzas a month. In a world where the rules of the game have changed, it’s the smartest investment you can make to protect everything you’ve worked for.