No state law requires drivers to have comprehensive and collision insurance, but your landlord or lender will almost certainly require you to purchase both types. Instead, the most collision insurance will pay is the actual cash value of your car, basically for what you could have sold it before the damage occurred. Collision insurance is worth it if, otherwise, you couldn't afford the cost of replacing your car after an accident or if you drive frequently in areas where the likelihood of an accident is high. The cost of repairs decreases as your car ages, so you don't want to overpay as your car loses value.
Collision insurance pays for damage to your car after a collision with another vehicle, regardless of who is at fault. If you're not financially able to pay out of pocket for the repair or replacement of your car if it suddenly breaks down, you should continue to take out comprehensive and collision insurance. State law never requires collision insurance, but dealers and banks often require it for leased or financed cars. Another example of a situation covered by collision insurance is if you lose control of your car and it rolls over.
You may be able to reduce your car insurance by looking up prices and comparing quotes several times a year. Michigan auto insurance companies offer special types of collision insurance because of unique state no-fault rules. Although collision insurance is optional, drivers should consider purchasing car insurance against collisions to protect their finances in the event of an accident. However, even so, you shouldn't abandon collision insurance if you can't pay out of pocket to repair or replace your car after an accident because of you.
Limited collision insurance only pays for the repair or replacement of the policyholder's car when another driver is at fault, while standard and comprehensive collision insurance applies regardless of who was at fault. 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. Instead of taking chances with a cheap auto insurance company, you can get quality coverage that won't break the bank with Nationwide. You should also maintain collision insurance for an old car if you can't afford to pay out of pocket to repair or replace the car after an accident.
However, Michigan's no-fault rules extend to vehicle damage, so Michigan residents must take out collision insurance if they want coverage for car repairs after an accident.