Consumer Counselor
Insurance Information for Michigan Consumers
[FIS-PUB 0200] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]
The Three Types of Collision Coverage
IF YOU WANT YOUR INSURANCE TO PAY
FOR DAMAGES TO YOUR CAR IN CASE OF
AN ACCIDENT, YOU MUST BUY THE
OPTIONAL COLLISION COVERAGE.
Michigan law requires you to have no-fault auto
insurance, which provides 3 basic coverages:
1. Medical expenses, payment of lost wages,
and replacement services if you are hurt in an
accident
2. Payment for damage your car does to
someone else’s property, other than a car
3. Payment in case you are sued and found
liable for injury to others
You are not required to buy collision coverage.
However, a lender may require you to purchase
collision coverage before giving you a car loan.
There are three basic types of collision coverage:
limited, standard and broad form. The chart on
the next page of this sheet tells you what you can
receive with each type of collision coverage if
your car is damaged in an accident. In Michigan,
each driver’s insurance covers damage to his or
her own car.
When you apply for auto insurance:
1. The company or agent must offer you
collision coverage and give you a CLEAR,
WRITTEN EXPLANATION of the different
types available to you.
2. The company or agent must give you a form
on which you accept or reject collision
coverage IN
WRITING. This form MUST
TELL YOU WHAT YOUR RIGHTS ARE if
your car is damaged in an accident under the
type of collision coverage you choose.
Deductibles
Collision coverage is often offered with a
deductible. A deductible is the amount you agree
to pay for damages to your car before the
insurance company pays anything. Not all
companies offer the same deductibles. The
higher the deductible, the lower the cost of your
collision coverage.
REMEMBER, you do not have to buy collision
insurance. IF YOU DO NOT, and you have an
accident, YOU WILL HAVE TO PAY FOR THE
DAMAGES TO YOUR CAR, EVEN IF YOU ARE
NOT AT FAULT in the accident. You can,
however, sue the at-fault driver to recover up to
$1,000 for damages to your car which he or she
caused and which are not covered by your
insurance. The at-fault driver is the one who is
more than 50% the cause of the accident. For
more information on this part of the law, see the
Insurance Counselor “Mini-Tort: An Exception to
No-Fault.”
If you have questions about your auto insurance,
talk to your agent or company. If your questions
are not answered, contact the Department of
Insurance and Financial Services (DIFS) at the
address or telephone number below. DIFS is the
state department that regulates insurance in
Michigan.