How Does PLPD Insurance Work in Michigan?

Before getting to know how PLPD insurance works, it is essential to know what PLPD is, and why it is important for you if you are residing in Michigan.

PLPD covers two essential aspects; personal liability, and property damage. Unlike Michigan, other states use terms like personal liability, bodily injury, and property damage. 

PLPD insurance covers bodily injury and property damage to the other driver and their passengers if you are at fault in an accident. 

But as all terms these are interrelated, so in Michigan it is commonly termed as PLPD. According to the State Law of Michigan, despite being a no-fault state, it is mandatory to have auto insurance in Michigan.

Unlike many other US States, Michigan is one of its kind, other US States are either known as at-fault, or no-fault states. But ever since the recent insurance law amendments in 2019, and 2020, Michigan is technically a hybrid state now even though it was once a purely no-fault state.

Major Components of PLPD Insurance You Need to Know

As the term PLPD goes by, it includes two components: Personal Liability and Property Damage.  

Although Michigan is technically a hybrid state, it is still officially a no-fault state. So, when it comes to PLPD Insurance it specifically covers the following factors for these two components. 

Personal Liability 

Bodily Injury: If you’re found responsible for an auto accident in which the other driver and the occupants in that vehicle have been injured, then you are legally obligated to compensate for the bodily injury and cover their medical bills for up to 3 years.

Of course, the amount you will have to compensate will greatly depend on the injury's severity and the extent of medical care they require.

Based on the amendments of auto insurance laws in Michigan, you’re required to have a PLPD insurance coverage of:  

• Up to $250,000 per person who’s hurt or killed in the accident  
• Up to $500,000 for each accident if multiple individuals are injured or killed 

You also have the option to purchase the lowest/minimum coverage limit which includes: 

• Up to $50,000 per person who’s hurt or killed in the accident
• Up to $100,000 for each accident if multiple individuals are injured or killed 

Loss of Wage: Depending on the severity of the accident, if the other driver, the vehicle’s passenger, or a pedestrian is injured, and is unable to work, then your insurance company will have to compensate up to 85% of the gross income annually.

However, there is a clause here, the maximum compensation limit is $6,811 per month since legal amendments in October 2023. So, based on that the total amount that you’ll have to compensate for up to 3 years may vary.  

Physical Impairment and Disability: If the person sustains critical injury for an auto accident in which you’re at-fault, and if that causes some sort of physical impairment and disability, then you may have to compensate for their loss of income for a longer period which can exceed over 3 years.

In this case, it will entirely depend on the verdicts given by the court. And your insurance company must either compensate a hefty amount, or it will have to compensate on a long-term basis.

Death of the Victim: If the victim dies in the accident, then depending on the legal circumstances and what the court imposes on you, you’ll have to compensate their spouse, and children.  

This will entirely depend on the person’s monthly income, and how dependent the deceased person’s family is on the total income.

Property Damage Liability

Vehicle Damage and Property Damage: The interesting thing about Michigan being a hybrid state is, it has exceptional clauses according to its mini-tort law. So, when an accident happens, there is a high chance that it wasn’t entirely your fault.

Under Michigan’s mini-tort law if you’re 50% or less at fault for an accident, then you’re generally not liable for any vehicle or property damage.

However, if the percentage exceeds 50%, then you’ll have to compensate for vehicle damages of up to $3000 for vehicle damages, and up to $1 million dollars for property damages.  

Although, the court has the authority to increase the maximum limit depending on the severity of the accident, and the legitimacy of the other person’s claim. 

Property damage mainly includes fences, trees, and buildings within the other person’s vicinity. Also keep in mind that the mini-tort law only applies to vehicles, and property damage, it’s not applicable for bodily injuries or medical bills. 

What PLPD Insurance Does Not Cover? 

PLPD Insurance only covers the damage, and compensations to the other driver, and the people who were in that vehicle. It does not provide any compensation for the damage to your vehicle, or bodily injuries.  

Apart from that PLPD Insurance also excludes the following,

Collision coverage: PLPD insurance does not cover collision coverage. Collision coverage is basically the cost to repair or replace a vehicle which has been damaged during an accident regardless of whoever is at-fault.  

PLPD insurance provides a portion of the cost for vehicle damage, which is up to $3000 as per the state law in Michigan. So, therefore it does not cover the entire cost of repairing or replacing a vehicle which is typically included in collision coverage insurance.

Comprehensive coverage: Comprehensive coverage includes injuries, vehicles, and property damage due to fire hazards, theft, flooding or any other natural disaster.

PLPD insurance is specifically designed to protect you from financial burdens with the standard, and minimum insurance coverage limit mandated by the state, so it does not include any other additional coverage. Therefore, comprehensive coverage is not included with the PLPD insurance policies.

How Does PLPD Insurance Work in Michigan?

If you’re residing in Michigan, it is mandatory for you to have PLPD insurance against each of the vehicles that you own. If you’re uninsured, then you may face lawsuits, and even jailtime.

You must at least have the minimum auto insurance coverage which includes:   

• $50,000 bodily injury per person  
• $100,000 bodily injury per accident  
• $10,000 property damage per accident in another state. 

This is the bare minimum mandated by the State Law of Michigan. However, the state's default insurance coverage should be $250,000 for bodily injury per person, $500,000 for bodily injury per accident, and $10,000 for property damage in another state. 

Depending on your driving records, legal track records, age, income, and credit history your PLPD insurance provider will suggest whether you should purchase the standard insurance coverage, or whether you should go for minimum coverage.

It is also important to note that PLPD insurance provides the mandatory state defined coverage limit, usually the recommended standard coverage. However, based on your necessities, and budget you can also opt for purchasing the minimum coverage.

But it’d be ideal to either go for the standard coverage mandated by the state or purchase higher coverage limits, especially in cases of critical accidents where you may have to compensate thousands, or even millions of dollars.

How to Claim PLPD Insurance? 

As Michigan is officially a no-fault state, either party can file a PLPD insurance claim in the event of an auto accident. However, it is the responsibility of the person not at-fault to claim the insurance. 

So, in this case, if you’re not at-fault for the accident, then you will have to file for the PLPD insurance either through your insurance company or you can directly claim it from the insurance company of the person who is at-fault.

What are the Benefits of Getting PLPD Insurance in Michigan?

PLPD insurance essentially works as a financial safety net in the events of an accident where you’re either partially at-fault, which is typically over 50%, or in accidents where you are completely at-fault.  

So, depending on the severity of the accident, you’re legally liable to compensate for major economic harm to the other driver, and its occupants.

In contrast here are the major benefits of having a PLPD Insurance:  

Covers the compensation of vehicle, property and bodily injury damages to the other driver, and its occupants

Saves you from hefty legal fines, especially in the event of a lawsuit

Instantly safeguards you from a massive financial burden 

Real Life Examples of PLPD Insurance in Action 

Based on the statistics of Michigan’s Criminal Justice Information Center, more than 312,000 car accidents take place annually, which leads to 78,000 people being injured, and about 1000 people killed.

It’s unfortunate that automobile accidents are so common in Michigan, which is why it is also crucial to ensure having a PLPD insurance at the very least.

To investigate how helpful PLPD Insurance is, we’ve spoken to the victims of these tragic auto accidents and conducted thorough research. We’re using an alias here, as the people whom we’ve surveyed does not prefer to disclose their real name.

Example 1: Nicole Smith

Nicole is a recent college graduate, and she has been seeking jobs recently. But unfortunately, she has been struggling to find one. She has been appearing in interviews, one after another. 

As she was mentally frustrated, so while returning home after her interview in the evening, she was somehow distracted. And, as she momentarily lost her focus on the road, she accidentally hit this car at a very high speed. The car that she hit was badly damaged, and the man who was driving the vehicle was badly injured. 

Luckily, as Nicole had PLPD insurance, she covered the costs of the accident she was responsible for. She said that the PLPD insurance company had provided a total compensation of almost $3000 for the next 3 years, and she didn’t have any deductibles. The entire compensation was covered by PLPD insurance.

Example 2:  Joseph Thompson 

Joseph is a professional plumber, so it was a Friday night, and he went to the bar to have a couple of drinks and enjoy the weekend eve with his friends. But that Friday night, he drank quite a lot.

He was still conscious enough to drive, at least that’s what Joseph thought. So, as he was driving under the influence, he couldn’t properly focus on the road. And suddenly he took a steep left turn at this intersection, and accidentally hit a minivan.

The minivan was partially damaged, but the driver was hurt quite badly. Upon realizing what happened, Joseph was frustrated at first, but with the PLPD insurance he compensated the other driver without having to pay a dime from his pockets.

To cover the medical bills, and the minor damage to the minivan, Joseph’s PLPD insurance compensated about $2500 in total.

Typically, these two examples are reality checks why PLPD is so important, particularly in Michigan as automobile accidents are very common here.

Final Remarks 

If you have read this far, you should have an overall understanding of how PLPD insurance works in Michigan.  

PLPD insurance provides standard coverage that will keep you safe from financial burdens in the event of an at-fault accident, plus it will also give you a sense of peace.

Although PLPD comes with some limitations, and conditions, once you’re fully aware of them, it will be easier for you to make the best out of your budget. After all, it is technically the most affordable auto insurance you can have in Michigan.

There are times when insurance, and other legal requirements can feel overwhelming. So, if you have any doubts about PLPD insurance, you should consult with a reliable PLPD company in Michigan to clarify your doubts.

Frequently Ask Questions 

What does PLPD cover in Michigan? 

PLPD insurance covers economic compensation to the other driver and its occupants which include health care expenses, wage loss, vehicle, and property damage in Michigan.

Is it mandatory to get PLPD insurance in Michigan?  

Yes, according to the State Laws of Automobile Insurance it is mandatory for you to have PLPD insurance in Michigan.

What is the full form of PLPD? 

PLPD stands for Personal Liability, and Property Damage. This term is commonly used in Michigan, whereas in other states it is known as liability insurance.

What is the minimum PLPD insurance coverage in Michigan?  

The minimum insurance coverage in Michigan includes $50,000 bodily injury per person, $100,000 bodily injury per accident, and $10,000 property damage per accident in another state.

Can you go to jail for not having PLPD insurance in Michigan?  

Yes, it is legally mandatory for all automobile owners to have PLPD insurance in Michigan. Uninsured vehicle owners can face a jail sentence of up to 1 year, $500 fine, or both. It can also lead to a 30-day suspension of the driving license until it’s proven that you’ve PLPD insurance.