What Does It Cover, and What Will It Cost You?
What Is PLPD Insurance?
PLPD insurance is a fancy acronym for Personal Liability and Property Damage insurance. As you research your car insurance options, you may hear “PLPD” tossed around as a buzzword more often than not. What is PLPD insurance, and what does it cover? We’ll answer both questions in detail to help you make sense of your auto insurance premium, starting with the basics of PLPD insurance.
PLPD insurance may be broken down into two separate categories:
Personal Liability insurance
Personal Liability insurance will cover another party’s injuries if you cause a car accident.
Property Damage insurance
Property Damage insurance will cover the damage you cause to another vehicle or personal property in an accident.
PLPD is a foundational component of any car insurance policy
Simple enough, right? But not so fast… PLPD definitions, terms, conditions, and requirements will vary by state.
If you carry basic PLPD coverage, then you may have an insurance policy that only meets bare minimum state requirements by law. This policy will likely exclude extra “full coverage” insurance for collision and comprehensive coverage.
PLPD is most commonly used in the state of Michigan to describe a car insurance policy that meets state minimum requirements.
“Bare-bones” PLPD insurance has taken different forms as it was adapted to meet various state laws throughout the nation.
The term “PLPD insurance” is still commonly used in Michigan; when used in other states, it may refer to basic liability car insurance per state minimum requirements.
PLPD car insurance is not to be confused with PLDL insurance
PLDL insurance – otherwise known as Public Liability and Property Damage insurance purchased by businesses that offer public services, i.e. electricians and contractors.
To provide a better example
Personal Liability minimum requirements in Michigan are: $20,000 per person and $40,000per accident.
Nonetheless, many Michigan attorneys recommend *carrying a higher liability amount at: $250,000 per person and $500,000per accident.
The minimum requirement for property damage coverage in Michigan is $10,000
Although attorneys often recommend a minimum of $100,000
*Which may only increase car insurance rates minimally.1
Under the umbrella of PLPD in a state like Michigan, property protection insurance, or PPI, is also required by law at $1 million in minimum coverage. PPI will insure property damage to non-vehicular property, including building damage and parked cars (considered immobile property). Personal Injury Protection (PIP) coverage is also required by law since Michigan is a no-fault state.
Again, the varying components that make up PLPD insurance will differ by state
Here is a closer look at how PLPD insurance may be factored into a car insurance premium
auto insurance policy
|actual cash value
actual cash value
|bodily injury||$30,000/person or
What Will PLPD Insurance Cover?
PLPD car insurance will cover:
Injuries for another party in an at-fault accident.
Damages to another party’s property in an at-fault accident.
Limited protection against lawsuits.
The reason that PLPD insurance is a requirement in almost every state is because it protects
the other party in an at-fault accident
To provide a better example
If you made the mistake of texting and driving and accidentally ran a stop sign, you could cause an accident by clipping a vehicle that had the right of way.
If two occupants in the vehicle were injured, your personal liability insurance under your PLPD policy would kick in to cover medical expenses.
Passengers may also choose to file individual claims for pain and suffering and could be awarded additional settlement amounts from the PLPD policy.
Settlements in an at-fault accident can’t exceed personal liability policy limits.
The property damage portion of your PLPD policy may take affect if you skid to a stop on a rainy day in rush hour traffic and hit a parked car.
Because a parked car is considered immobile property, it is covered by property damage in a PLPD policy.
Your PLPD insurance will pay for the cost of the other party’s vehicle repair, up to state minimum limits.
If your PLPD policy has minimum requirements of 20,000/40,000, such as in the Michigan example above, up to $20,000 could be paid out per person with a total of $40,000 per accident.
In this accident example, each passenger could receive$20,000 to add up to $40,000 maximum paid out for two passengers in the accident.
Continuing with the example, if you live in Michigan, property damage minimums will be set at $10,000.
This means that your insurance will only cover$10,000in vehicle property damage for the parked car.
Since PLPD meets minimum state requirements, it provides very limited protection in the case of a lawsuit
If you cause a crash that results in serious injury or death, standard liability insurance requirements in a state like Michigan of 20,000/40,000 will hardly cover legal expenses and damages awarded in court.
As mentioned above, umbrella insurance is recommended to provide protection against a lawsuit; you may also consider full coverage insurance to increase PLPD amounts.
Clearly, there are certain areas that PLPD does not cover, like:
Covers damages in a collision with another vehicle; coverage and deductible amount will depend on policy terms and conditions.
Covers vehicle damage outside of an accident related to fire, theft, animal collisions, and more; coverage and deductible amount will depend on policy terms and conditions.
Offers limited property damage coverage; in a state like Michigan, the at-fault driver’s insurance company will only pay out $1000 in damages to the other vehicle in an accident.
Although full coverage is a broad insurance term that can vary by provider, many insurance agents consider an upgraded policy with collision and comprehensive insurance to be “full coverage.”
Full coverage insurance may function as extended PLPD with larger coverage amounts above basic liability limits.
In many cases, adding on to a PLPD policy with full coverage insurance is beneficial since PLPD will not cover your damages or injuries in an at-fault accident.
If you cause an accident and total your car or sustain a serious injury, you’ll be responsible for your own vehicle replacement expenses and exorbitant medical bills. A full coverage policy that includes personal injury protection (PIP) and collision coverage can offer insurance for these circumstances.
As coverage increases, so will the
How to Save Money on PLPD Insurance
The most important factor to keep in mind with PLPD insurance is that it does not cover damage to your vehicle or property in an at-fault accident. PLPD is basic insurance coverage.
You may choose PLPD instead of full coverage insurance if you drive an older car or use your car infrequently.
If you are still paying on a new vehicle loan or lease, full coverage insurance may be required above PLPD by your lender.
Here are several circumstances where PLPD insurance may be the best choice for you:
You can cover the cost of vehicle repair or replacement
Your vehicle has a very low value.
You own an old car and don’t drive often.
You need temporary insurance on an old vehicle until you buy a new car.
You no longer owe payments on your vehicle loan.
You want to lower insurance rates on one low-value car and continue paying higher insurance rates on a new car.
If you have a low value car that you don’t drive very often, PLPD may make the most sense to save a few bucks on your monthly insurance bill.
You can also consider PLPD as temporary insurance on an old car until you’re ready to buy a new vehicle.
Some families opt to use PLPD insurance on an old vehicle that a teen is driving while continuing to pay full coverage insurance on the family car to keep annual premiums affordable.
If PLPD insurance is right for you
It’s important to understand that you must have enough money in the bank to pay for vehicle repair or replacement costs if your car is totaled in an accident.
And speaking of affordable…
Right about now, you may be wondering what you can do to get low-cost PLPD insurance.
First and foremost, it’s essential to understand that there are various factors that can affect basic insurance rates – some that you can control and some that you can’t.
Check out this static factors that dictate your PLPD insurance rates
factors you can’t control
age Young drives with little experience will typically pay more for car insurance.
gender Men pay around $15,000 more for auto insurance over lifetime than women.
demographic Drivers in urbanized areas and areas with high crime rates pay more than their counterparts in rural low-crime rate areas do.
Fortunately, there are a number of factors that you can control
to keep insurance affordable, like
Good credit score
Amount of coverage
Taking into account these factors, it can be difficult to predict exactly how much you can expect to pay for PLPD insurance.
Unfortunately, in a state like Michigan where PLPD is most prevalent, insurance rates are recognized as some of the highest in the country. Michigan was ranked by Insure.com as the second most expensive state for car insurance on a 2013 vehicle. Granted, PLPD insurance is likely to be cheaper than full coverage insurance for a brand-new car.
Average car insurance rates will vary throughout the country and are estimated at$791per year2Use our car insurance estimator to find your price.
You can lower PLPD rates even further by using the tips listed above.
If you take the time to focus on being a better driver, it will quickly pay for itself. Drivers with clean records may pay 10% less on car insurance across-the-board.2 As an added bonus, if you don’t cause an accident, you won’t need to use your PLPD insurance. Filing a claim can cause insurance rates to skyrocket.
Or, this may be a case where the “squeaky wheel gets the grease.” Many times, all you have to do is ask when it comes to scoring discounts from your insurance agent. You may qualify for defensive driving, professional, or student discounts. You can also consider bundling multiple insurance policies together to lower all premiums – with potential savings of 15%-30% on two or more policies.
If you’re in the market to upgrade your vehicle, consider the safety features in the new car you buy. A safer vehicle will cost less to insure since features like airbags, antilock brakes, and automatic seatbelts are likely to reduce injuries and lower the total expense of an accident. A good credit rating can also be beneficial to keep car insurance rates reasonable.
Lastly, don’t make the mistake of overpaying for insurance coverage. You may be one of the 76% of insured drivers that pays for comprehensive insurance on top of basic liability. Another 71% of drivers also pay for collision coverage in their policy.2
If you meet many of the PLPD requirements,
Such as driving an older car or having money in the bank to pay for vehicle replacement, you could save money by dropping extra insurance coverage. If the time is right, it helps to consult with your insurance agent one-on-one to determine if basic PLPD offers enough coverage to protect you on the road.
But there is a catch
For the majority of drivers, basic PLPD isn’t recommended since it leaves you financially and physically vulnerable in an accident.
You may have to pay for extra damages in a serious accident that aren’t covered by your policy. You will also be responsible for your own vehicle damages and personal injury expenses if you cause a major crash.
PLPD is most advantageous for temporary use on an older vehicle
If you’re pressed for cash, you may be able to “get by” with PLPD until you can afford to upgrade your policy. At the very least, most drivers start out with PLPD and build from there since it meets state requirements to drive legally.
As you decide whether to keep or upgrade PLPD insurance, ask yourself what you have to lose
If you can’t afford to pay for repair or the total replacement of your vehicle, PLPD insurance without full coverage add-ons may leave you high and dry in an at-fault accident.