What Is Limited Collision Coverage in Michigan?

Limited collision coverage in Michigan is an optional, lower-cost form of auto collision insurance that pays to repair your own vehicle only when you are 50% or less at fault in the accident. If your actions caused more than half of the crash, the coverage pays nothing. That all-or-nothing fault rule is what separates it from the other collision options Michigan insurers must offer, and it’s the single thing to understand before you choose it.

How the 50% Fault Rule Works

Michigan law requires every auto insurer to offer limited collision coverage to new applicants for private passenger vehicles. You don’t have to buy it, but the insurer must present it as a choice alongside broad form collision when you first apply.¹

The rule is straightforward. If you’re in a collision and your action or inaction was not more than 50% of the cause, limited collision pays to repair your vehicle. Under the base version of the policy, there’s no deductible, so the insurer covers the full repair cost. Insurers can also offer a version with an optional deductible approved by the state’s insurance director; if you picked that version, you still owe the deductible even when the crash wasn’t mostly your fault.¹

Cross the 50% line and the coverage shuts off entirely. The statute defines “substantially at fault” as action or inaction that caused more than half of the accident, and once you’re on the wrong side of that threshold, your insurer pays zero toward your car. You cover the whole repair bill yourself.¹ That’s the tradeoff for the lower premium: you’re accepting the full downside of any accident you cause.

How It Compares to Standard and Broad Form Collision

Michigan insurers must offer three collision tiers, and the differences come down to what happens based on your share of fault.

Limited collision pays for your vehicle damage only when you’re 50% or less at fault. If you’re mostly at fault, the insurer pays nothing. The base form carries no deductible, though a deductible version can be offered.²
Standard collision pays for your vehicle damage regardless of who caused the accident. You always pay the deductible you selected.²
Broad form collision pays for your vehicle damage regardless of fault, and your deductible is waived when you’re 50% or less at fault. When you’re mostly at fault, you pay the deductible.¹

Broad form is generally the most expensive, limited collision the cheapest, and standard sits in between. The practical question is how much risk you’re willing to carry yourself. A single at-fault fender bender can cost thousands out of pocket under limited collision, while broad form would cover the same repair minus the deductible.

What Limited Collision Does Not Cover

Because the coverage hinges entirely on fault, several common situations can leave you paying for your own repairs.

The obvious one is any accident you primarily cause: rear-ending another car, sliding through a stop sign, losing control on ice. If your share of fault exceeds 50%, the insurer owes nothing.

Single-vehicle incidents are another gap. If you hit a pothole and damage your suspension, strike a deer, or slide off the road, there’s usually no other driver to assign fault to, and limited collision generally won’t help because there’s no one else to be less at fault than.

Hit-and-run accidents sit in a gray area. If an unidentified driver damages your car and flees, you presumably weren’t at fault, but proving that becomes harder when the other driver can’t be located. Limited collision should respond if fault can be established, though the claims process may involve more investigation than a straightforward two-car crash with an identifiable at-fault driver.

When the Mini-Tort Can Fill the Gap

Michigan’s no-fault system generally bars suing another driver for vehicle damage. The exception, called the mini-tort, lets you recover up to $3,000 from an at-fault driver for damage to your car that isn’t already covered by your own insurance.³

This matters most for drivers carrying limited collision. If another driver hits you and you’re 50% or less at fault, your limited collision handles the repair. If your repair costs run higher than what’s covered, or if you don’t have collision coverage at all, the mini-tort lets you pursue the at-fault driver for up to $3,000, typically in small claims court.

Two conditions apply. Comparative fault still reduces your recovery by your share of responsibility, and you can’t recover anything if you were more than 50% at fault.³ Your vehicle also must have carried the mandatory Michigan coverages at the time of the accident. An uninsured vehicle can’t bring a mini-tort claim.

Who Limited Collision Makes Sense For

Limited collision is built for drivers who want to keep premiums down and are willing to self-insure the risk of causing an accident. If you have the savings to absorb a repair bill, or if your vehicle is older and worth less than the gap in coverage, the lower monthly cost can make sense.

The calculation shifts if you drive in heavy traffic, on roads with frequent winter hazards, or long distances every day. The more exposure you have, the more likely a mostly-your-fault incident becomes, and under limited collision that single event lands entirely on you. Standard or broad form costs more each month but caps your downside at the deductible no matter who caused the crash.

The 2019 reforms to Michigan’s no-fault law reduced the PIP portion of many premiums, which for some drivers freed budget to move up a collision tier.⁴ If you chose limited collision years ago to keep costs manageable, it’s worth asking your agent whether broad form fits now.

Limited Collision Is Not Michigan’s Required Coverage

Drivers sometimes assume collision coverage of some kind is mandatory in Michigan. It isn’t. What state law actually requires is a different set of three coverages: personal injury protection (PIP), property protection insurance (PPI), and residual liability insurance.⁵ PIP covers your medical expenses and lost wages after an accident regardless of fault. PPI covers damage your vehicle causes to other people’s property. Residual liability covers claims others bring against you for injuries or death.

Collision coverage, in any of its three forms, protects your own vehicle and is optional. You could legally drive with only the three mandatory coverages, but you’d be fully responsible for damage to your own car in every accident. Choosing limited collision is a middle path: some protection when the other driver is mostly at fault, and nothing extra when you are.

If an insurer denies a limited collision claim you believe should have been paid, the Michigan Department of Insurance and Financial Services handles complaints about insurer conduct in the state.⁶

1
Michigan Legislature. Michigan Insurance Code MCL 500.3037
2
State of Michigan. The Three Types of Collision Coverage
3
Michigan Legislature. Michigan Insurance Code MCL 500.3135
4
State of Michigan. Auto Insurance Reform FAQ
5
Michigan Legislature. Michigan Insurance Code MCL 500.3101
6
State of Michigan. Insurance Market Regulation