Legal Edge: How Michigan auto collision claims work


LANSING, Mich. (WLNS) – Confused about how auto collision claims work in Michigan? WLNS is here for you with an explainer in today’s Legal Edge.

Michigan is a no-fault state, meaning if you get in a collision you should turn to your insurance for payment.

However, there are some instances where you can sue another motorist for fault in a crash.

Attorney Brian Waldman explains.

One claim you can bring is when a driver causes damage to your vehicle. Previously, you could only sue for up to $1,000 in property damage.

Now, you can sue for up to $3,000 in property damage to your vehicle, to the extent that’s not already covered by insurance.

Michigan has what’s known as “comparative fault,” meaning if you are to receive money for damages caused by someone else’s negligence, it is paid in proportion to their fault.

For example, if you sue for damage and it’s found that you’re 25% at fault for the crash, you will receive only 75% of your claim.

Collision insurance is optional, and some who have vehicles worth less than $3,000 may opt out of purchasing collision insurance.

However, there are several other factors to consider, such as if you can pay to have your car repaired out-of-pocket if you’re found at fault.

Collision insurance is expensive, and if you have a car that doesn’t carry a significant value you may want to skip it, said Waldman.

People often forget how collision insurance works as well.

If your car is totaled, collision insurance will only pay what the car is worth at the time of the crash. Not how much you have left to pay.

Let’s take a look at another example. If you purchase a new car with a small down payment, drive it off the lot and immediately get into a collision and total your car, insurance will only pay what it’s worth at that moment, not how much you have left to pay on the vehicle.

You’ll still have to make payments on the car, even if you don’t have it anymore.

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