Full coverage for Michigan car insurance buyers refers to collision and comprehensive protection. Both of these are physical damage insurance which protects the driver’s own vehicle.

If the owner took out a loan to pay for the vehicle, the financing company may insist that he or she keep full coverage in place until the loan has been paid off. The company will want to protect its investment as long it has an interest in the vehicle.

Collision coverage pays out if an accident involving hitting another car or an object occurs. It also covers damage caused in a rollover accident. In a situation where the car is totaled, the insurance company will write a check based on the vehicle’s cash value, less the deductible the policyholder has chosen.

Comprehensive insurance pays out for losses other than a collision. If the damage is caused by wind, hail, fire or an act of vandalism, this is the part of the policy which pays for the cost of repairs. It also pays out when the vehicle is stolen and not recovered.

Like collision coverage, comprehensive protection pays out based on the vehicle’s cash value. Since a car starts to depreciate the minute it is driven off the lot, after a few years it may no longer be worthwhile keeping full coverage in place. Dropping it can also help a vehicle owner save on his or her car insurance costs as well.

Michigan has adopted the no-fault system for car insurance. Under this type of arrangement, a person who has been injured in a car accident will make a claim to his or her own insurance company for damages as a result of the accident. It makes the process of compensating injured people a much quicker and easier process than suing the at-fault driver.

All drivers in the state must buy Personal Injury Protection (PIP) coverage. This part of the insurance policy pays for medical bills incurred as a result of the accident, as well as up to three years of lost wages. Policyholders who choose a deductible for their PIP coverage or who coordinate it with an existing health insurance plan can get a discount on the cost of their coverage.

Property Protection Insurance (PPI) is also required in Michigan. It pays for property damage caused by the policyholder – up to $1 million.

Even under a no-fault car insurance system, a driver can be sued for damages. In a situation where a Michigan driver is the at-fault driver in an out-of-state accident, he or she can be sued. Under state law, drivers must buy at least $20,000 in bodily injury liability protection to pay for one person’s injuries and $40,000 to pay for all injuries and damages stemming from the same accident. Property damage liability insurance of at least $10,000 must be put in place as well.