What is PLPD Insurance?

PLPD stands for personal liability and property damage insurance. It is more frequently called liability insurance and is an extremely common form of automobile insurance. PLPD insurance does not reimburse you for damage to your own property. Instead, PLPD coverage pays for the other driver's costs of medical treatment, plus repairing damage to their property when you are at fault in an automobile accident.

Liability insurance is sometimes sold as a single item or as two separate policies. The term “PLPD” is most commonly used in Michigan, though PLPD insurance is available nationwide. It's also mandatory in almost every state, so if you don't have PLPD/liability coverage, you could be putting yourself in legal jeopardy.

What is Personal Liability Insurance?

Personal liability (PL) insurance is one part of PLPD, and it goes into effect when you're at fault in an accident. It covers the medical bills of the other driver and their passengers, as well as their lost wages due to injury. It's more commonly referred to as "bodily injury" coverage.

Generally, there are two parts to your personal liability insurance coverage limit: the maximum amount covered per person and the maximum per accident. They're often written together: for example "$25,000/$50,000," or shortened to "25/50." PLPD coverage as a whole is often written using three numbers, and the first and second numbers are PL coverage: 25/50/20.

Let's look at two examples where you have 25/50 personal liability coverage and are at fault in an accident:

  • One person in the other car was injured, with medical costs totaling $26,000. Your liability insurance would cover the first $25,000, but you would be responsible for the remaining $1,000.
  • Three people in the other car were injured, and they each accrued $20,000 in medical bills. Two of the patients would have their medical costs completely covered by your liability insurance, but you would have to pay for the last $10,000 of the third person's care.

Note that for these simplified examples, we've assumed that no one involved had personal injury protection or medical payments coverage.

Every state that requires PLPD/liability insurance has a minimum amount of personal liability you must have to drive your car. However, you may choose to increase these limits in order to avoid owing money after an accident. The most common limit is $25,000/$50,000, but the exact amount varies by state.

What is Property Damage Insurance?

Property damage (PD) insurance covers damage to another party's property when you're at fault in an accident. This includes damage to another vehicle, like a cracked windshield, popped tire or damage to a car's frame. It also covers damage to other property, such as a fence or structure of a home.

The amount of property damage liability coverage you have is represented by a single number that refers to the total dollar amount of damage you're protected for. It's often shortened by increments of 1,000, so $20,000 might be referred to as 20. PLPD insurance coverage as a whole is often expressed using three numbers, and the third number is PD coverage: 25/50/20.

As with personal liability coverage, you're required to have property damage coverage to drive your car in almost every state. The minimum amounts required range from $5,000 to $25,000, but you can choose to add more coverage to further protect yourself.

PLPD Coverage Limitations in Michigan

Though PLPD insurance is required in Michigan, the state's stringent no-fault laws mean that PLPD is applicable far less frequently in Michigan than in other states:

  • Personal injury protection (PIP) coverage in Michigan, which is required for all drivers, covers your own injuries after an accident until you are fully recovered, with no dollar limit.
  • Drivers are usually responsible for damage their own vehicle sustains in an accident, regardless of who was at fault.
  • Property Protection Insurance (PPI) provides $1 million in coverage for property damage other than vehicles to damaged in an accident.

As a result, PLPD coverage in Michigan is primarily used by Michigan drivers if they are in an accident while out of state, or in certain other extenuating circumstances, such as if someone is killed in a car accident.

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