If I am involved in a car accident, who pays for the damage to the vehicle?
Answer: It depends. In Michigan, if you want your insurance company to pay for damages to your car, you must purchase collision coverage. Under Michigan’s “mini-tort” provision, the most you can recover from the other vehicle under Michigan law is $1000, and this amount is only recoverable if the other vehicle is more than 50% at fault for causing the accident. In almost all situations, the rest of the vehicle damage will be paid by your own auto insurer, after the applicable deductible has been paid.
To recap, in almost all situations, if you are involved in a car accident, and you do not have collision coverage, you will to pay for the damages to the car, even if you are not fault.
What is collision coverage?
Answer: Collision coverage is coverage for vehicle damage sustained in a car collision. It is different from comprehensive coverage, which is coverage for damage caused in a non-collision event.
What are examples of comprehensive coverage?
Answer: Examples of comprehensive coverage includes fire, wind, vandalism, theft or impact with a deer. These events are covered by your own auto insurance coverage only if you purchased comprehensive coverage. Like collision coverage, this coverage often has a deductible.
What are the different types of collision coverages?
Answer: Generally, there are three different types of collision coverage: limited, standard and broad form.
- Limited: If you are more than 50% at fault, your insurance pays nothing and you are responsible for the repairs to your car. If you are 50% or less at fault, your insurance pays after the deductible is paid.
- Standard: If you are more than 50% at fault, your insurance pays after you have paid the deducible. If you are 50% or less at fault, your insurance pays after the deductible is paid.
- Broad: If you are more than 50% at fault, your insurance pays after you have paid the deductible. If you are 50% or less at fault, your insurance pays and you do not have to pay the deductible.
Do I get a rental vehicle if my car is being repaired?
Answer: It depends on the policy you purchased with your insurance company. Often, insurance companies will offer to pay rental car expenses or extended transportation expenses if the insured (you) has paid for this coverage. It is important to look at your policy and see if a rental car expense rider is included.
Who pays the bank loan if my vehicle is financed?
Answer: You are still liable for any loans on the vehicle. If the fair market value of your vehicle is less than the outstanding loan, you may still be required to pay the entire amount of the loan.
