Michigan insurance laws require that drivers carry no-fault insurance. If you have an accident, basic no-fault coverage pays for injuries and for damage your car does to other people's property, including properly parked cars. You'll need to buy collision if you want coverage for any damage incurred to your car.
Collision
Collision coverage pays to repair or replace your vehicle if it's damaged in an accident. If your vehicle is financed or leased, your lender may require that you have this coverage. There are 3 types of collision coverage available in Michigan:
The protection provided by the 3 types of collision coverage differs based on who's at fault in an accident:
- Standard: Repair or replacement of an insured car is covered regardless of fault. You'll be responsible for paying your deductible if you ever file a claim.
- Broadform: You'll only have to pay your deductible if you're found to be more than 50 percent at fault in a covered accident. If you're less than 50 percent
at fault, you won't have to pay your deductible.
- Limited: Repair or replacement of an insured car is covered only if the driver is found to be less than 50 percent at fault. If this is the case, you'll have to pay your deductible.
However, if the driver of the insured's car is more than 50 percent at fault, damages resulting from the incident are not covered.
How much protection does this coverage provide?
Collision coverage typically pays for damages as long as they don't exceed your car's actual cash value. (Actual cash value is your car's original purchase price, minus the amount it has depreciated.)
If your car needs to be replaced, you're generally reimbursed for your car's actual cash value.
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What's an auto insurance deductible?
The amount you see in your Michigan auto insurance quote refers to the deductible, or the portion of a claim you're responsible for paying.
A higher auto insurance deductible can lower the cost of your insurance premium. You should balance this savings against your ability to absorb a larger out-of-pocket expense.
For example, if you choose a $1,000 deductible and your car sustains damages totaling $1,500, you'll pay $1,000 and your insurance company will pay $500.
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Comprehensive
Comprehensive coverage is optional in Michigan. However, it must be included on auto insurance policies that have collision coverage, and it can't be purchased without bodily injury coverage.
This coverage provides protection for:
- Damage not resulting from a collision. (e.g., damage from falling objects, fire, certain natural disasters, and vandalism)
- Theft
- Glass damage
- Damage from hitting an animal
- Vehicles covered by the Michigan auto insurance policy
Who might benefit from buying comprehensive coverage?
If your car is financed or leased, the finance company will probably require that you carry this auto insurance coverage. If you have a newer vehicle or one in excellent condition, you may need this coverage to replace or repair the vehicle in the event of a loss. If you have an older car or one in poor condition, you may not want to pay for this coverage.
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Emergency road service
Emergency road service coverage is optional in Michigan. This auto insurance coverage, sometimes called towing coverage, pays for the cost of towing your car if it becomes disabled. Emergency road service coverage cannot be purchased without collision coverage.
How much protection does this coverage provide?
The coverage limits you see in your auto insurance quote refer to the maximum amounts that will be paid per incident, per term, respectively.
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Rental reimbursement limits
Rental reimbursement coverage is optional in Michigan. Rental reimbursement coverage can't be purchased without collision and comprehensive coverage.
What's covered?
This coverage pays for the cost of a rental car if you can't drive the insured vehicle due to theft or damage from an accident.
How much protection does this coverage provide?
The dual coverage limits you see in your Michigan auto insurance quote refer to the maximum amount that will be paid per day, per accident, respectively.
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Customized equipment
Customized equipment coverage is optional in Michigan. If you buy this auto insurance coverage, you must also buy comprehensive and collision coverage.
What's covered?
Customized equipment coverage is appropriate if your vehicle has permanently installed custom parts or equipment other than those installed by the original manufacturer.
Examples of customized equipment include:
- Any dealer-installed equipment that is not offered by the original manufacturer
- Special equipment on vehicles, vans, and trucks, including: running boards, brush bars, roll bars, undercarriage lighting, fog lights, bed liners, camper shells, trailer hitches, etc.
- Customized wheels, spoilers, suspensions or performance-related equipment
- Stereo, sound recording, and television equipment
- Customized paint or decals
How much protection does this coverage provide?
Within the limits you select in your auto insurance quote, this coverage reimburses you for the lowest amount of the following: the actual cash value, the declared value, or the actual cost to repair.
Who might benefit from buying customized equipment coverage?
Your Michigan auto insurance policy covers only the original equipment included by the manufacturer. Should your vehicle have additional equipment, accessories, enhancements, and changes that alter the appearance or performance of the vehicle, it's advisable that you buy additional auto insurance coverage to protect these items.
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Loan/lease gap coverage
Loan/lease gap coverage is optional in Michigan. To buy this auto insurance coverage, you must have collision and comprehensive coverage and your car must be financed or leased.
What's covered?
This coverage protects you if your car gets damaged. You will be reimbursed for the difference between the following items:
- The actual cash value of your car at the time of the loss, less the applicable deductible and the vehicle's salvage value (if retained by the owner or insured) and
- Any greater amount owed on the vehicle at the time of loss, less any unpaid finance charges, excess mileage or wear and tear charges, any other charges or expenses associated with the loan or lease, and the vehicle's salvage value (if retained by the owner or insured).
How much protection does this coverage provide?
Any payment under this coverage will not exceed 25 percent of the actual cash value of the vehicle at the time of the loss.