Collision coverage pays, up to the limits of coverage, for damage to your vehicle or a vehicle you're driving due to a collision or rollover. This coverage is generally required if you have a vehicle loan. Driving can be a rite of passage for teens, but for parents, having a teen driver can be stressful and expensive. Your child will need car insurance coverage as soon as they receive their driver's license.
Collision coverage is a type of car insurance. However, motorists may want to add it to their policies to protect themselves from financial losses. Once you understand the different types of coverage, you can decide which ones to include in your personal insurance package. Drivers can easily find the value of a car with Edmunds or Kelly Blue Book online vehicle valuation calculators.
Bodily injury liability (BI) coverage pays, up to the limits of coverage, for damages caused by injuries or the death of others in a car accident for which you or the driver of your vehicle are legally responsible. A general rule of thumb is that if the cost of comprehensive and collision insurance exceeds 10% of the value of your car, you can consider eliminating them. Look, if another motorist causes an accident, their insurance must pay for the repair of the victim's car or buy a new one for the victims if their vehicles are declared total losses. Unless you've had a lot of accidents in the past, collision coverage can be a relatively inexpensive way to get comprehensive protection for your car and your finances.
Collision insurance pays for damage to your car after a collision with another vehicle, regardless of who is at fault. If you rely on your car for everyday use and can't afford repairs, collision insurance could keep you out of a difficult situation if your vehicle is damaged in an accident. State law never requires collision insurance, but dealers and banks often require it for leased or financed cars. While collision coverage isn't required by law, it may be worth buying even if your vehicle isn't financed, as it can help if your vehicle is damaged, destroyed, or stolen.
A good rule of thumb is that you should have collision insurance for your car until the cost exceeds 10% of the vehicle's value. However, it's a good milestone to consider, since, as the value of a vehicle decreases over time, so does the value of its insurance coverage. A deductible is required for most collision insurance claims in Michigan, except when the policyholder has extensive collision coverage and was not at fault. Michigan auto insurance companies offer special types of collision insurance because of unique state no-fault rules.
Collision insurance repairs or replaces the insured car if it is damaged, either by another vehicle or by an object such as a tree or a mailbox. Collision insurance is not required by any state law, but if your car is on lease or loan, your lender may require it.