What You Need to Know About Collision Insurance in Michigan
Every day, a car accident in Michigan causes vehicle damage and a collision coverage insurance claim. What does this mean? Who pays for the repair work? This article helps answer these questions.
First, a little background on what collision coverage is. Collision coverage is insurance coverage for the actual damage to your car when it is involved in an accident. Collision coverage pays for repairs to your car when it is damaged in a car accident.
This is different than coverage for a stolen vehicle or repairs if your vehicle is damaged by hail. That coverage is called comprehensive and is completely different than collision coverage.
What Does Collision Coverage Mean in Michigan?
Collision insurance in Michigan is very important to have. Under the Michigan no-fault law, the other driver who caused the accident does not pay for the vehicle damage he or she created. Instead, your own car insurance company will pay for the vehicle damage, but only if you purchased collision coverage. Collision coverage is not mandatory in Michigan, meaning many motorists driving on Michigan roadways have valid car insurance, but do not have collision coverage.
The most money an at-fault driver must pay for vehicle damage under Michigan law is $3,000. That’s all you can get from the other driver. Obtaining this money is called a “mini-tort” claim.
To submit a mini-tort claim, typically a claimant may have to present to the at-fault vehicle’s insurance carrier a collision damage estimate, photographs of the damaged vehicle and a copy of the declaration sheet from your own auto insurance carrier.
The declaration sheet is the page a person receives with the insurance policy that lists all the various coverage amounts.
Because mini-tort claims involve $3,000 or less in damages, if the claim is not worked out through the other driver’s insurance carrier, the claimant must sue in small claims court. In small claims court no attorneys may be retained for representation.
What are the Types of Collision Coverage in Michigan?
There are three types of collision coverage – broad form, standard and limited.
Broad Collision Coverage – For broad form coverage, your car insurance pays if you are 50% or less at fault for causing the accident. If you are more than 50% at-fault, your car insurance will pay the claim and you do not have to pay the deductible.
Standard Collision Coverage – For standard form coverage, your car insurance pays you 50% or less if you are at fault for causing the accident. However, if you are more than 50% at fault, your insurance company will pay the claim but you will be responsible for paying the deductible.
Limited Collision Coverage – As the name implies, limited collision coverage provides the most basic coverage. If you are 50% or less at fault for causing the accident, your insurance pays the vehicle damage after the deductible has been met. If you are more than 50% at fault for causing the accident, your insurance company pays nothing.
What Does Collision Coverage Do?
Collision coverage requires the insurance company to pay for the repairs for your damaged vehicle. This should include the cost of towing the vehicle and storage for up to a certain amount. Typically, the insurance company will have an “insurance adjuster” evaluate the damage. The adjuster may also require the vehicle be repaired at a preferred collision shop. The insurance company will then pay the collision ship for the vehicle repairs.
What Happens If I Don’t Have Collision Coverage?
Without collision coverage, you are driving around “naked” so to speak. If your car is hit, you have no right to compensation for the vehicle damage from any insurance carrier beyond the $3,000 mini-tort.
As a result, purchasing collision insurance in Michigan is highly recommended. Collision coverage can be very expensive, especially in cities such as Detroit, Flint and Saginaw. That is why it is important to shop around for insurance.
Often, an independent insurance agent help you find the best coverage for the lowest cost. They can do this because unlike a captive agent – like State Farm – they can price compare between different insurance companies.
