What Is PLPD Auto Insurance? Why Is It Important in Michigan?

Last Updated on December 17, 2022

PLPD auto insurance is an acronym short for personal liability and property damage. Sometimes, this form of insurance is simply shortened to “liability insurance.” PLPD is the foundation of every auto insurance policy. This form of insurance is required in Michigan and every other state in the country except for New Hampshire. Below, let’s take a closer look at the purpose of PLPD auto insurance and why it is so important in Michigan.

PLPD Auto Insurance in Michigan

Michigan mandates all drivers have PLPD auto insurance coverage. The state requires upwards of $20,000 in bodily injury liability coverage along with $40,000 of coverage per accident and $10,000 worth of property damage liability coverage. This amount of coverage is often presented as 20/40/10.PLPD auto insurance explained

Personal injury protection (PIP) and property protection insurance (PPI) are also required in Michigan. Furthermore, Michigan is a no-fault state, which means that your auto insurance policy will pay for you and your passenger’s medical bills regardless of who was at fault for the accident. Because Michigan is a no-fault state with such high PIP and PPI requirements, Michigan’s auto insurance rates tend to be the highest in the country.

Because Michigan is a no-fault state, PLPD coverage in Michigan is typically used for accidents out-of-state or in special circumstances, such as fatal accidents.

PLPD Explained in Plain English

PLPD might sound like a confusing acronym yet it is actually fairly simple. PLPD stands for personal liability and property damage. It’s what most people call “liability coverage.”

Liability coverage pays for damage you are responsible for. Therefore, for PLPD coverage to kick in, you generally have to be at-fault for the accident.

The “personal liability” part of PLPD usually refers to bodily injury liability coverage, which covers injuries to another person. The “property damage” part of PLPD usually refers to property damage liability coverage, which covers damage to another person’s property. This is usually their vehicle, but can also include things like mailboxes, landscaping, walls, etc.

The Two Parts of Personal Liability Insurance Coverage Limits

Personal liability auto insurance coverage limits include the maximum amount of money covered per individual as well as the maximum amount of money covered per accident. These components are commonly written together, such as $30,000/$55,000. In some cases, they are abbreviated in the form of 30/55.

As a whole, PLPD coverage is commonly written with three numbers (i.e., 30/55/10), with the first two numbers as the PL coverage. The initial number is the maximum amount of money paid per person. The second number is the maximum amount of money paid per accident. The third number is the maximum amount paid for property damage.

PLPD Coverage Example

Consider a situation in which you are at fault for an accident. The individual in the other vehicle is injured. His medical costs amount to $36,000.  If you have 35/50 personal liability coverage, your liability insurance will account for the initial $35,000, yet you will still be on the hook for the $1,000 that is not covered.

Consider another situation in which three individuals in the other vehicle are injured, amassing $20,000 worth of medical expenses each (totaling $60,000). Your liability insurance covers $50,000 of these medical costs, yet you will still be responsible for the remaining $10,000.

In no-fault states like Michigan, however, where personal injury protection is required by law, your liability insurance will not usually pay for the other driver’s medical bills. His or her PIP coverage will foot the bill, limiting your liability.

Be Mindful of PLPD Insurance Limitations

PLPD insurance does have inherent limitations. It does not cover everything. The following types of auto insurance are not part of a PLPD policy:

Collision Coverage – While liability coverage pays to repair damage to the other party’s vehicle, collision coverage pays for damage to your own vehicle in the event of an accident.

Comprehensive Coverage – While liability and collision coverage will pay for damages to your vehicle that stem from a collision, comprehensive coverage will pay for non-collision situations. Comprehensive coverage applies to damage from flooding, theft, fire, hail, vandalism, heavy wind, etc.

Uninsured Motorist Coverage – According to recent estimates, 1 in 7 drivers in America are uninsured. Because of Michigan’s high auto insurance rates, that number in Michigan is even higher. According to the Insurance Information Institute, over 20% of drivers in Michigan are uninsured. Uninsured motorist coverage protects you in case you get into an accident with one of these drivers. It also is there to cover you in accidents with underinsured drivers and in hit-and-run situations.

File Your PLPD Claims Swiftly

The amount of the claim(s) and the limits of your auto insurance policy determine how much the insurer will pay after an accident. It is particularly interesting to note that if several people are injured in the accident, the claims are paid on a first-come, first-serve basis. In other words, those who file a claim before the rest of the victims have a better opportunity to be covered.

If you are the victim of another driver’s negligence and you believe PLPD will apply, it is in your interest to file your claim immediately after the accident. If you fail to file your claim in a timely manner, it is possible that the PLPD coverage will be exhausted by other injured drivers or passengers who filed ahead of you.

Simply put, if you are injured in an auto accident, make sure you file your claim for damages as soon as possible to make sure you are compensated.

Buying PLPD Insurance

PLPD insurance is required by law to drive in Michigan. It is the main component of all auto insurance policies in Michigan.

After purchasing your vehicle, the first thing to do is to buy insurance coverage. All auto insurance companies that sell insurance policies in the state of Michigan will be familiar with Michigan’s minimum insurance requirements, so you will not need to worry about buying coverage that is below the legal limits.

Michigan’s stringent auto insurance laws, including its no-fault requirements, will, unfortunately, cause your monthly premiums to be much higher than those of drivers in other parts of the country.

The best ways to combat these high insurance rates are to take advantage of every auto insurance discount you qualify for and to compare quotes from multiple insurance providers. The top auto insurance providers in Michigan all offer generous and wide-ranging discounts.

To begin your search for PLPD insurance in Michigan, please start with the best rates auto insurance companies in the state:

InsurerA.M. Best RatingBBB RatingJ.D. Power Rating
Erie InsuranceA+A+5/5
COUNTRY FinancialA+A+4/5
State FarmA++A+4/5
James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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