As a no fault insurance state, auto owners in Michigan sometimes face the dilemma of purchasing PLPD vs Full Coverage car insurance. There are risks and benefits associated with both types of insurance and sometimes the decision is made for you.
PLPD stands for Personal Liability and Property Damage and full coverage is, well, full coverage however, full coverage plans may have protection that can be customized. Generally, when a vehicle has a lien on it, the lien holder or bank will require that the vehicle has full coverage. That way the value of the car or truck is protected and they can get the money that is owed even if there is an event or accident that damages the vehicle beyond repair. For auto owners that do not have a lien, deciding on whether to purchase liability or full coverage can be challenging and knowing your options is important.
By analyzing your age and driving habits and your vehicle; its use, age, and value, your insurance agent is a crucial tool when making the decision to purchase PLPD or full coverage. For example, a sixteen year old in Greenville (48838) driving a ten year old vehicle is going to have a higher insurance premium than a forty year old driving a three year old car, because, statistically they are at a higher risk for accidents. If they are using the car for daily commutes to school and back, then the risk may be lower than if they drove to Edmore (48829) several days a week for a job. However, insuring the commute around Greenville and Edmore would be different than insuring a commute from Grand Rapids (49548) and Wyoming (49509) because of traffic conditions and the risk associated with urban congestion and rural commutes.
Personal Liability and Property Damage (PLPD)
As required by Michigan law, PLPD is the minimum amount of insurance protection a driver can carry. Because it only covers the essential insurance coverage, PLPD is less expensive than full coverage. However, it is important to realize that only liabilities and property damages are covered, so in the event of an accident all repairs and replacement costs fall to the vehicle owner.
The personal liability portion of PLPD is broken into three parts: PPI, BI/PD.
- Personal Injury Protection: covers your injuries sustained in an accident
- Residual Bodily Injury: refers to the coverage you hold for accident where you are found at fault. The minimum protection in Michigan is 20/40/10, or $20000 for each person killed or injured – $40000 for multiple people killed or injured – $10000 for property damage in another state. The amounts can be customized according to need or risk, but will increase the premiums.
Property Damage Liability: refers to the coverage for damage to personal property.
It is important to realize that PLPD only covers a fixed amount for damages and that can only scratch the surface of a lawsuit.
Full coverage is really a misleading phrase because it is unlikely that you could carry a policy that covers every possibility. Full coverage is more like extended or expanded PLPD with greater PPI, BI/PD amounts, collision coverage, and comprehensive coverage. The protection is greater and, thus, the premiums.
- Collision Coverage (COLL): provides protection against a physical collision with a vehicle. The amount that is covered varies as does the deductible (the amount you are required to pay out of pocket before coverage applies).
- Comprehensive Coverage (COMP): sometimes referred to as ‘other than collision’ (OTC) provides protection against damage to a vehicle outside of an accident, such as; theft, fire, flood, broken or cracked windows, damages from animals, falling objects, and natural disasters.
As you can see knowing the value of your vehicle, either in replacement costs or repairs, and its use play important roles in choosing the right auto insurance. Compass Insurance Agency agents are highly trained at comparing the rates from several companies to get you the best coverage for the best price.
For questions contact your nearest friendly Compass Insurance Agency Agent today!
Grand Rapids Telephone: 616.245.555