Types of Collision Insurance Coverage in Michigan
If you are a driver with an active auto insurance coverage in Michigan and you get involved in an auto accident, according to no-fault insurance law, you will have covered by the insurance company all the costs that are relevant to other party’s injuries and damages as well as damages to surrounded parked cars.
And that’s all. You won’t get paid for your car’s damages, so it’s really up to you to find a way to fix or replace your car as cheap as you can.
However there is always an option to save some money proactively. You can purchase collision coverage for your car, it’s not required by the state, it’s optional and it’s the best way to protect your car from damage costs resulting from a car accident, even if it’s your fault.
There are 3 different types of Collision Coverage you can choose for your car according to your needs. The standard or regular, the broadened and the limited collision. With other types of auto insurance, collision coverage may not be extended if you are at fault for an accident.
There are some things you should know about collision insurance coverage, for instance, the collision will only pay for repairs up to the fair market value, so you can’t ask for more than usual and get benefit of it. The collision will come with a deductible amount that you must pay which might potentially get you a lower premium cost. It can also be required by a financial institution in case your car is under lien or currently leased.
Standard collision coverage will repair or replace your car regardless of whose fault is. But the limit or the losses covered will be up to the market value of the vehicle minus the deductible.
Broad or broadened collision coverage is nearly identical to standard version offering an added benefit that the standard collision coverage isn’t. You only have to pay the deductible included if you are more than fifty percent responsible for the accident. If your fault is less than 50%, your deductible is waived. That’s the only difference from standard collision.
Limited collision coverage is usually not selected by Michigan drivers and there is a logical explanation for that. If you are less than 50% at fault in an auto accident, the insurance will cover the cost of the damage repairs after the deductible is paid, but if you are more than 50% at fault, then you get nothing. The limited insurance won’t pay for anything, in other words, you are totally exposed to losing your vehicle in case you cause an accident.
Furthermore, no bank or financing institutions will accept limited collision coverage in order to fund you for a vehicle purchase.
Broadened collision is usually more expensive than the standard type of collision. But again it depends on the vehicle you drive and the total coverage you have selected. However, it’s better to choose either standard or broadened coverage instead of limited.
In case you find it hard to decide which type to purchase, you can always use our site to compare and make the most suitable to your needs choice.