Michigan’s Auto Insurance Law Has Changed
The information contained in the following publication pertains to auto
insurance policies issued on or before July 1, 2020. Publications about auto
insurance policies issued on or after July 2, 2020 are available at
michigan.gov/autoinsurance.
For more information about the new auto insurance law and how it will affect
you, please visit: www.michigan.gov/AutoInsurance.
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.
[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
Michigan law requires you to have no-fault automobile insurance on your car. If you have an accident,
this required insurance pays for injuries to people and for damages your car does to other people’s
property and to properly parked cars. IT DOES NOT PAY FOR ANY OTHER DAMAGE TO CARS.
You must buy collision coverage if you want coverage for damage to your car in case of
accident. The other driver’s insurance will not pay for damage to your car.
There are three kinds of collision insurance you can choose from: limited, standard, and broad form. The
chart tells you when each kind of insurance will pay YOU if your car is damaged in an accident. Your
collision coverage will not cover damage to the other driver’s car.
REMEMBER, you are not required by law to have collision insurance, BUT YOU MUST HAVE
COLLISION INSURANCE IF YOU WANT INSURANCE TO PAY FOR DAMAGES TO YOUR CAR
RESULTING FROM AN ACCIDENT.
If your vehicle is damaged
in an accident and you
have this kind of collision
coverage.
Nature of Accident
You are MORE THAN 50%
at fault (you hit a tree, a
person, another vehicle,
etc.)
You are 50% OR LESS at
fault (you are rear-ended,
side-swiped, etc.)
No Collision Coverage
Your insurance pays nothing.
You are responsible for the
cost of repairs to your car.
Your insurance pays nothing.
You are responsible for the
cost of repairs to your car.*
Limited Collision Coverage
Your insurance pays nothing.
You are responsible for the
cost of repairs to your car.
Your insurance pays. If you
have chosen a deductible,
your insurance pays the cost
of repairs over and above the
deductible. You must pay
the deductible.
Standard Collision
Coverage
Your insurance pays, except
the deductible that you have
chosen. You must pay the
deductible.
Your insurance pays, except
the deductible that you have
chosen. You must pay the
deductible.
Broad Form Collision
Coverage
Your insurance pays, except
the deductible that you have
chosen. You must pay the
deductible.
Your insurance pays. You
do not have to pay the
deductible.
*You may be able to collect up to $1000 from the other driver under the “mini-tort” provision of the no-
fault law. For more information, see the Insurance Counselor on “Mini-Tort: An Exception to No-Fault.”
[FIS-PUB 0200] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]
About DIFS
The mission of the Michigan Department of Insurance and Financial Services is to ensure access to
safe and secure insurance and financial services fundamental for the opportunity, security and success
of Michigan residents, while fostering economic growth and sustainability in both industries. In addition,
the Department provides consumer protection, outreach, and financial literacy and education services
to Michigan citizens. For more information please contact DIFS at 877-999-6442 or visit
www.michigan.gov/DIFS
