Every day, a car accident in Michigan causes property damage to a vehicle. How is this covered? 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.
Collision coverage is very important to have if you own an automobile in Michigan. 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 $1,000. 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 must 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.
Because mini-tort claims involve $1,000 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 and no attorneys may be retained for the litigation.
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, you 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 if you are 50% or less 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.
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 $1,000 mini-tort. As a result, purchasing collision coverage is highly recommended.