With all the terms used in insurance, it can be hard to understand what the different types of coverage are, and what is and is not included in your policy. Here’s a quick guide to get you started:
Collision Coverage: Collision coverage pays to repair or replace your vehicle if it is damaged in an accident. This type of coverage will pay for the damages on the vehicle as long as they do not exceed the vehicles actual cash value. If damages to the vehicle do exceed the actual cash value of the vehicle, then the vehicle would be considered a total loss. Coverage is available with or without a deductible. A deductible is the amount you agree to pay toward the cost of the repairs before the insurance company steps in and pays the rest. The three types of collision offered are:
Limited Collision without a Deductible: This collision coverage pays to repair your vehicle if you are less than 50% at-fault in an accident. If you are 50% or more at-fault, you receive no benefits. You can choose to have a deductible; in that case if you are less than 50% at-fault in an accident you will be responsible for a deductible.
Broad Form Collision Coverage: This collision coverage pays to repair your car regardless of fault. If you are 50% or more at fault, you must pay a deductible. If you are less than 50% at fault, you pay nothing. This coverage is more expensive, but is a benefit if you are not at fault in an accident.
Regular/Standard/Basic Collision: Regular collision will pay regardless of fault, but you will always have to pay the deductible.
Under Michigan No-Fault: you may be able to collect up to $1000 from the other driver under the mini-tort provision of the no-fault law. This amount would go toward a deductible or to repair the vehicle; it will not pay more than damages to the vehicle.
When in doubt, call your independent insurance agent for advice.