Our insurance attorneys are always asked about PLPD and auto insurance. What kinds of auto insurance is best? What insurance coverage is unnecessary? We understand that the language in your auto insurance policies are confusing. Even the names of the auto insurance policies can be very confusing.
Today I’d like to talk about what PLPD auto insurance is and what it covers.
PLPD stands for Public Liability and Property Damage. It is a common term, but will mean something different in each state. It’s basic meaning is that your auto insurance policy contains only the types of coverages required by law. However, when people say they have “basic PLPD,” what they mean is that they dropped their collision coverage and usually their comprehensive coverage also. Motor vehicles on the roads are required by law to carry PLPD in almost every state, including Michigan.
Liability coverage: In Michigan, the minimum amount of Liability Coverage you must carry is $20,000 per person and $40,000 per accident. However, we recommend that you never carry less than $250,000 per person and $500,000 per accident. The difference is usually only a few dollars more.
Property damage coverage: In Michigan, the minimum amount of Property Damage coverage you must carry is $10,000.
However, we recommend that you carry a minimum of $100,000. Property Damage coverage only applies to out-of-state accidents. For instance, if you travel to Ohio, which is a Tort state (Michigan is a No-Fault state) and you cause an accident, you are responsible for all of the property damages caused to the victim’s car, and also including medical expenses, lost wages, pain and suffering. If you cause $25,000 in damage to someone else’s car and only have $10,000 of property damage coverage, guess who could be personally responsible for the remaining vehicle damage bill?
Property protection insurance: In Michigan, Property Protection Insurance (PPI) is required by law. PPI covers property damage to buildings and other non-vehicular property, with the exception of parked cars. Parked cars are considered property as opposed to motor vehicles. PPI coverage in Michigan is $1 million.
Personal Injury Protection coverage: In Michigan, Personal Injury Protection (PIP) coverage is also required. PIP coverage is the heart of No-Fault coverage and pays your medical expenses, wage loss and other related expenses if you are injured in an auto related accident. Here’s more information on No-Fault PIP coverage.
Optional auto insurance coverages
Collision and comprehensive: Collision and comprehensive (fire, theft, vandalism) coverages are not required by Michigan law. They are optional. However, If you are still making payments on your vehicle, your finance company will probably want you to have collision and comprehensive coverages to protect their lien right to the asset (your car).
Mini tort: Mini tort (limited property damage) coverage is also optional. If you are at fault for damage to another motor vehicle (not a parked car), your insurance company will pay up to $1,000 of damage to the other vehicle, not otherwise covered by the other person’s insurance policy.
Therefore, if you have PLPD coverage in Michigan, what you really have is liability, property damage (for out-of-state accidents), PPI (for in-state accidents) and No-Fault PIP. You may or not have mini tort coverage, although most people do. What you will not have is collision coverage or comprehensive coverage, although some people still carry comprehensive without the collision coverage.
You can read more about PLPD and other types of insurance coverage in our free guide: What Auto Insurance is Right for Me?
– Photo courtesy of Creative Commons, by meddygarnet