What Does It Cover, and What Will It Cost You?
What Is PLPD Insurance?
PLPD insurance may be broken down into two separate categories:
Personal Liability insurancePersonal Liability insurance will cover another party’s injuries if you cause a car accident.
Property Damage insuranceProperty 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
PLPD is most commonly used in the state of Michigan to describe a car insurance policy that meets state minimum requirements.
PLPD car insurance is not to be confused with PLDL insurancePLDL 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
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
|Liability||bodily injury property damage||$30,000/person $25,000/occurrence||$219 $150|
|Physical Damage||comprehensive collision||actual cash value actual cash value||$34 $192|
|Uninsured Motorist||bodily injury||$30,000/person or $60,000/accident||$52|
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 two occupants in the vehicle were injured, your personal liability insurance under your PLPD policy would kick in to cover medical expenses.
Settlements in an at-fault accident can’t exceed personal liability policy limits.
Because a parked car is considered immobile property, it is covered by property damage in a PLPD policy.
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.
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
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:
CollisionCovers damages in a collision with another vehicle; coverage and deductible amount will depend on policy terms and conditions.
ComprehensiveCovers 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.
Mini TortOffers 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.
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 insurance premium
How to Save Money on PLPD InsuranceThe 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 youIt’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
- Driving record
- Policy discounts
- Safety features
- 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.
You can lower PLPD rates even further by using the tips listed above.
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 vehicleIf 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 loseIf 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.