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Property Damage (PD) versus Property Protection Insurance (PPI)

February 20, 2013 by Steven M. Gursten

What to do when property is damaged in a car accident and what coverage pays

property damage car accidentMany people refer to basic insurance that does not include collision coverage as “PLPD.” This stands for Personal Liability and Property Damage.

Property Damage: For out of state auto accidents

However, Property Damage (PD) coverage is not actually part of the Michigan No-Fault Act.  It is part of the minimum financial responsibility statute, which requires:

  • All insured vehicles in Michigan to carry a minimum of $20,000 per person of Liability Coverage (PL), and;
  • $10,000 of property damage (PD) coverage.

Property Damage coverage is actually for out-of-state accidents.  For instance, if you were driving in Ohio and were at fault for damaging someone else’s car, you would be responsible for all of the damages to the victim’s car,  as well all of their other damages.

This is also the law in the majority of states, and as an insurance lawyer, the idea that someone who is at fault and causes thousands of dollars in vehicle car damage is absolved of everything over the mini-tort amount is what I find infuriates more people than anything else about our law in Michigan.

Because collision coverage only covers your own auto and because PPI coverage only covers property damage in Michigan, your PD coverage would be used to pay for the other person’s car damage in the other state.

CAUTION: $10,000 of PD coverage, which is the minimum, is really inadequate.  For instance, if you are driving outside of Michigan and you are responsible for totaling someone’s $50,000 car, your PD coverage would pay the first $10,000 of damage, but then you would be on the hook for the remaining $40,000.  For this reason, we recommend carrying a minimum of $100,000 of PD coverage, which is fairly inexpensive.

Property Protection Insurance: For Michigan auto accidents

The Michigan No-Fault Act requires all auto policies to carry Property Protection Insurance (PPI) coverage.  If your car does damage to someone’s property in Michigan, such as a parked car, fence, tree, etc., your insurer will pay for their damage through your PPI coverage.

PPI coverage always has a $1 million policy limit.

PPI coverage is paid without regard to fault in an auto accident.  For instance, if you are waiting to make a left turn and another vehicle strikes you and pushes you into a telephone pole, both your insurance company and the insurance company of the wrongdoer will share equally in the cost to repair or replace the telephone pole.

Who do I sue for a PPI claim?

The statute of limitations on a Property Protection Insurance claim is one year. If your parked car or any other property is damaged by another driver, the actual responsible party is the driver’s insurer, not the driver.

If you are forced to file a lawsuit to enforce your PPI claim, you must name the insurer as the Defendant.  If you fail to do so and instead name the driver and/or owner of the car as the defendants, and the one year statute of limitations expires, you will not be able to name the insurer to the lawsuit at a later date.

The only exception is if the car was uninsured.  In that case, you must name the driver and or owner as defendant(s) in the lawsuit.

Related information:

The insurance coverage that an insurance lawyer recommends

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