PLPD insurance stands for personal liability and property damage insurance, and is an extremely common form of auto insurance, but means something different in every state. PLPD insurance doesn’t reimburse you for damage to your own property but pays for the other driver’s cost of medical treatment, and repairing damage to their property when you’re at fault in an automobile accident.
All motor vehicles on the roads are required by law to carry out PLPD insurance in every state, including Michigan. PLPD insurance is also known as liability insurance and is sometimes sold as a single item or as two separate policies. The term ‘PLPD’ insurance is commonly used in Michigan, and if you don’t have PLPD coverage when driving, you could be putting yourself in legal trouble.
What is Personal Liability Insurance?
Personal liability (PL) insurance is one part of the PLPD insurance, and it goes into effect when you’re the one at fault in an accident. It will cover the medical bills of the other driver and their passengers, along with their lost wages due to injury. It’s also known as ‘bodily injury’ coverage. In general, there are two parts to your personal liability insurance coverage limit, which are:
- The maximum amount covered per person
- The maximum per accident
These are often written together: for instance, ‘$25,000/$50,000’ or are shortened to 25/50. The PLPD coverage as a whole is written using three numbers, with the first two numbers being the PL coverage, which in this instance will be 25/50/20.
Here are two examples of instances where you have 25/50 personal liability coverage and are the individual at fault in the accident:
- 1 person was injured with medical costs totaling $26,000. Your liability insurance is going to cover $25,000, but you’ll need to pay the remaining $1,000 out of your pocket.
- 3 people in the car were injured, and each of them accrued $20,000 in medical bills. Two of these patients will have their medical costs covered by the liability insurance completely, but you’ll need to pay $10,000 for the third person’s care.
In these simplified examples, we assumed that no one involved had personal injury protection or medical payments coverage.
Each state that requires PLPD/liability insurance has a minimum amount of personal liability that drivers need to drive their cars. However, drivers may choose to increase these limits to avoid owing money after an accident. The most common limit is $25,000/$50,000, but the amount varies by state.
What is Property Damage Insurance?
The property damage (PD) insurance covers damage to another individual’s property when you’re at fault in an accident. That includes damage to another vehicle, such as a cracked windshield, a popped tire, or damage to the frame of a car. It also covers damage to other properties, like a fence or structure of a house. The amount of property damage liability coverage you have will be represented by a single number, which refers to the total amount of damage you’re protected for.
It’s sometimes shortened by increments of 1,000, so $20,000 may be referred to as 20. Another thing you may not know is that PLPD insurance is expressed using three numbers, with the third number being the PD coverage, so it may be written as 25/50/20. As with personal liability coverage, you are required to have property damage coverage to drive a car in almost every state. The minimum required amounts range from $5,000 to $25,000, but you can choose more coverage to protect yourself further.
What is Not Part of PLPD Insurance Coverage?
Here are some of the common types of auto insurance coverage that aren’t a part of a PLPD insurance policy, and are as follows:
· Collision Coverage
Collision coverage is meant to pay for repairs to the insured person’s car or truck if it was damaged in an accident. It’s optional, and there are four types of collision coverage, which are broad form collision coverage, standard collision coverage, limited collision coverage without deductible, and limited collision coverage with a deductible.
· Comprehensive Coverage
Comprehensive coverage is meant to pay for repairs to the car and truck that was caused by something other than an accident and includes damage caused by flooding, hail, vandalism, theft, or fire. It will also cover damage caused by hitting an animal, like a deer.
· Uninsured/Underinsured Motorist Coverage
The Uninsured Motorist (UM) and Underinsured Motorist Coverage (UIM) protects drivers in the event that they’re involved in a crash by a driver who was uninsured (a hit-and-run driver is treated as an uninsured driver for UM purposes) or by a driver who was covered by a policy that didn’t have adequate liability limits.
· Mini-Tort Coverage
If you’re at fault for causing damage to another motor vehicle, your insurance company will pay up to $1,000 (or $3,000 after July 1, 2020) of the cost to repair damage to the other vehicle. The mini-tort only covers vehicle damage that is not covered by the other person’s insurance policy. That’s known as a mini-tort claim.
So, if you have PLPD insurance coverage in Michigan, what you have is a liability, property damage (for out-of-state accidents), PPI (for in-state accidents), and No-Fault PIP. You may or may not have mini-tort coverage, even though most people have them.
What you won’t have is collision coverage or comprehensive coverage, even though some people will still have comprehensive coverage even without collision coverage.