Do You Understand Your Collision Coverage?

We know this may not seem like the most exciting topic, we will do our best to keep it short, sweet, and to the point! (Honestly, this is really good information to have!). The one thing most people can say about insurance is that they understand how their auto deductible works. Well over time we have discovered there may be some confusion on that, especially when it comes to your collision coverage and how it applies in the State of Michigan.

Did you know that in Michigan there are three different types of collision insurance that you can have on your personal automobile? Yeah, you read that correctly, three. Most people are under the assumption that Michigan is a No-Fault State, if I am not at-fault for the accident I don’t have to pay my deductible. In certain cases this is accurate, in others, it’s not. Michigan is indeed what you would call a No-Fault State regarding personal auto insurance, however, it is dependent on the type of collision coverage you have selected on your policy.

Let’s break it down.

No-Fault Insurance: Michigan’s auto law acts a little differently than other states and requires that each insurance company pay for its own policyholders’ injuries and/or physical damage, regardless of fault.

There are three types of collision coverages that you have the ability to select on a personal auto policy in the State of Michigan.

• Broad Form Collision – This means that should you be deemed to be less than 50% at-fault for the accident by your insurance company your deductible is waived. (No out-of-pocket cost for you!)
• Standard or Regular Collision – This means that regardless of fault you will be on the hook for that deductible (at least, initially). After your claim has been handled by your insurance company, you can file something called a Mini-tort Claim. Mini-tort is recoupment or reimbursement which you may be entitled to collect from the at-fault party’s insurance company should you choose to file a claim through them. The recoupment or reimbursement is limited to that of your selected deductible amount. Now, for those people who do not carry any type of collision coverage on their vehicle, if you are not at-fault; the Mini-tort reimbursement is limited to the cost for repairs to your vehicle up to a maximum of $3,000.
  • You may ask: How one would go about filing or requesting a mini-tort claim? Your agent can help you with that!
• Limited Collision – There is never a deductible required with Limited Collision. However, in order for there to be coverage on your automobile for any given accident, the insured (you) must be less than 50% at-fault and supply a Police Report. This means if you are at-fault in an accident, there is no coverage for the damage to your vehicle.

Now, we know what you’re thinking…how do I know which type of coverage I have? When creating your policy with your agent you would have selected which type of coverage you wanted on your personal automobile. These types of coverages can be changed through your agent, online, or through the My Pioneer app! (Shameless plug - if you don’t have the My Pioneer app you should get it).

Wow. That was a lot of information, we hope that this helped to clear up any questions you may have had about collision coverage. If it did the opposite and you are confused or in need of clarification, feel free to contact your agent! They are great at what they do and are your best resource for help with understanding your coverages!

Disclaimer: This is a general interpretation of processes and coverage. All claims are subject to Insuring Agreements, Endorsements, Exclusions, Terms, and Conditions of the Policy.

Have any questions about what you just read? Please contact your Independent Insurance Agent or email us at socialmedia@psmic.com!