Car Insurance: Collision Coverage

What is it?

Collision provides coverage for damage to your vehicle from striking an object while driving. This does not include animals (covered under comprehensive). 

What are My Options?

1. Type of Collision Form

• None - No coverage is provided (of course)
• Limited - covers Collision damages when driver of insured vehicle is not more than 50% the cause of the accident.  No deductible or $100 deductible options available
• Regular -  covers damage to the automobile caused by any type of collision.  Written subject to a deductible.
• Broad - covers collision damages regardless of who is responsible for the accident.  Deductible selected is applicable if driver of insured vehicle is more than 50% the cause of the accident.

2. Deductible

• $0
• $100
• $250
• $500
• $750
• $1,000
• $2,000
• $2,500

How Do I Choose?

Choose your deductible based 2 things:

1. How much can you afford out of pocket at any given moment? This is one factor to figure out your deductible. Know that as the deductible gets larger, your premium will decrease.
2. ALSO KNOW that you likely should not claim anything less than twice your deductible. For instance, you should not claim a $600 repair when you have a $500 deductible- you will only get $100 from the insurance company but that small claim will go on your record, likely costing you hundreds more over the course of three to five years in your policy rating. 

I would almost always recommend Regular form collision coverage. My reasoning? (instead of reading, check out the video below)

• Limited only provides coverage if you aren't at fault. Think about all the times you've almost backed into someone else's car- that is an at fault accident and that fender and bumper can cost upwards of $3,000
• Why not Broad? In Michigan, drivers often have Limited Property Damage Liability (LPDL aka Mini-Tort), which is $1000 in liability to reimburse you for your collision deductible if they, the other driver are at fault. This almost negates the reason for having Broad collision because you are paying to have your deductible waived if the other person is at fault. Why pay for a benefit someone else will pay for? There is the chance they may not have the coverage- it isn't required in Michigan. The issue is, you are paying $200+ extra per year to maybe take advantage of not paying your deductible. And yes, it saves you time during the claim and saves you from paying up front, but you get it back in the end from the other person's LPDL. To make my point, if you had a $500 Broad deductible and it cost $200 more per year than regular form, you would have to have a not-at-fault collision every 2.5 years for the cost to be worthwhile- let's hope that is not your driving record.

*Please remember, we have not reviewed your situation so the information above might not correctly apply to your situation- there may be more that goes into these choices that we cannot advise on if the correct questions are not asked.