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Collision Insurance in Michigan

Collision Insurance in Michigan

There are no states that legally require collision insurance. In some states, insurance agencies only write certain types of policies because each state has its own requirements. Of course, agents will often suggest different levels of coverage with most of them looking for the absolute optimal level of coverage for their clients.

Understanding Michigan Collision Insurance

One of the most common types of automobile insurance coverage is collision insurance, which will pay for damages that occur in an accident even if it is your fault. (With other types of insurance, coverage may not be extended if you are determined to be at fault.) There are some facts that you should keep in mind when choosing collision insurance including: Collision Insurance in Michigan

  • It will only pay for the cost of repairs up to the fair market value of your vehicle. That amount may not be what you owe on a loan or lease, nor will it be what you personally believe your vehicle to be worth.
  • It will come with a deductible amount that you will have to pay. This amount can vary at the start of the policy based on what you choose. A higher deductible amount can potentially lower the amount of the premium that you would pay.
  • Michigan collision insurance may be required by a financial institution if there is a lien or lease on the vehicle.

The Collision Insurance Variations Offered by Michigan Insurance Agencies

In some states, such as Michigan, collision insurance is offered in several forms. The three types of collision insurance offered by Michigan insurance companies include:

  • Standard Collision Insurance: This insurance will repair or replace an insured car regardless of who is determined to be at fault.
  • Broad Form Collision Insurance: With this coverage, you only have to pay the deductible included if you are determined to be more than fifty percent at fault in a covered accident.
  • Limited Collision Insurance: If you are less than fifty percent at fault in a covered accident, the insurance will cover the cost of repairs after the deductible is paid. If you are determined to be more than fifty percent at fault in a covered accident, the limited collision insurance will not pay for anything.

Changing the Cost of Your Insurance Coverage

Insurance can be very expensive, however, there are ways to bring the cost down. The cost of the premium that you pay can be brought down in a number of ways:

  • By seeking out all of the potential discounts that are available. Examples include: paperless, paid in full and multi policy discounts
  • By agreeing to pay a higher deductible amount upfront

A special note about the deductible: when you are involved in a covered accident, your insurance will pay for the amount of repairs to your car (up to the fair market value) after the deductible amount has been satisfied. For instance, if you have a $1,000 deductible amount and your car is determined to need $5,000 in repairs, you will need to pay the first $1,000 of those repairs before the insurance will kick in.