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What PLPD auto insurance really means

January 29, 2015 by Steven M. Gursten

People need to understand PLPD is only the bare minimum insurance coverage required by law, PLPD leaves out collision, comprehensive, uninsured motorist and mini tort coverages

plpd insurance

What  does PLPD really mean?

I write this because most of the people I speak with as an insurance attorney who use the term “PLPD” are using it the wrong way.  People call me after they’ve been involved in a car accident, or when their own auto insurance company is refusing to pay a medical bill, and most of the time, people are not using PLPD correctly. Here’s what you need to know about PLPD auto insurance:

  • “PLPD”  stands for “Personal Liability and Property Damage.”
  • This is what PLPD really means: PLPD is auto insurance that is very cheap,  because it provides  the bare minimum of insurance coverage that’s required by Michigan’s auto No Fault law.
  • In Michigan, a “PLPD” policy would provide nothing more than No Fault coverage and liability and property damage at minimal $20,000 bodily injury policy limits. That means that is $20,000 only if YOU cause a car accident and you are at fault. It does nothing to protect you or your family if you are injured because someone else is at fault. For this, you need uninsured and underinsured motorist coverage, which is incredibly important, very inexpensive, and something that our attorneys strongly recommend.
  • PLPD also means  NO collision coverage, no car rental coverage, and no optional additional mini tort coverage.
  • To meaningfully protect yourself, your family and your vehicle, you must purchase auto insurance with considerably more extensive coverage than what a PLPD policy would provide. The good news, if you just ask your agent, most people are surprised by how inexpensive these additional, optional coverages really are to add to your auto insurance. I like to say that for the price of a movie with popcorn, you have usually adequately protected you and your family with auto insurance for the year.

Below I will discuss in greater detail what PLPD is and, most importantly, what it is not.

What is PLPD (the good, the bad, the ugly)?

A PLPD policy provides the absolute minimum coverage allowed by law.

In Michigan, the No Fault Law requires that vehicle owners purchase three types of auto insurance coverage: “personal protection insurance” (also known as “personal injury protection” or PIP insurance); “property protection insurance” and “residual liability insurance” (which consists of both bodily injury and property damage liability). (See MCL 500.3101(1))

The following chart explains each of the types of mandatory auto insurance coverage, including the minimum coverage limits:

Mandatory Auto Insurance Types Explanation of Coverage Minimum Policy Limits
Personal Injury Protection (PIP) PIP 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. There is no mandatory minimum policy limit. Limitations on coverage are set forth in the No Fault Law. (See MCL 500.3107)
Property Protection Insurance 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. There is no mandatory minimum policy limit. PPI benefits coverage is limited to $1 million. (See MCL 500.3121)
Liability for Bodily Injury Provides coverage in the event the insured is at-fault in causing an accident that results in “bodily injury” or death. Minimum policy limit is $20,000 per person and $40,000 per accident. (See MCL 500.3009(1))
Property Damage Liability Provides coverage in the event the insured is at-fault in causing an accident that results in “property damage,” including “injury to or destruction of property of others…” Minimum policy limit is $10,000. (See MCL 500.3009(1))

If you want to know more about the difference between “Property Protection Insurance” (PPI) coverage and Property Damage Liability coverage, take a look at my blog post, “Property Damage (PD) versus Property Protection Insurance (PPI).”

What is NOT part of PLPD coverage?

Below are the important types of auto insurance coverage that will not be part of a PLPD policy:

  • Collision Coverage: Collision coverage pays to repair the insured’s car or truck if it was damaged in Michigan car or truck accident. It’s optional and there are four types of collision coverage:
  1. Broad form collision coverage;
  2. Standard collision coverage;
  3. Limited collision coverage without a deductible; and
  4. Limited collision coverage with a deductible.

To learn more about collision coverage, take a look at my blog post, “Top 8 facts about Michigan collision coverage insurance.”

  • Comprehensive coverage: Comprehensive coverage pays to repair car or truck damage caused by something other than a collision with another car, such as fire, theft, vandalism, hail or flooding. It also pays for damage caused by hitting an animal, such as a deer. For more information, take a look at my blog post, “Will my insurance cover vehicle damage from a deer car accident?”
  • Uninsured/Underinsured Motorist coverage: Uninsured Motorist (UM) and Underinsured Motorist coverage (UIM) protects you in the event you you’re in a crash caused 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 with inadequate liability limits. Here’s more information about UM and UIM.
  • Mini-Tort coverage (also called Limited Property Damage): 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. This is called a mini tort claim (Note: So long as you were insured at the time of a crash, the mini tort limits your liability for damage to another driver’s vehicle at $1,000). Here’s more information about the Michigan mini tort.

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