I get a lot of calls every week from Michigan car accident victims. When I ask them what type of auto insurance they have, many will say “I have full coverage” or I” have PLPD.” But what exactly do all these terms mean. This blog post seeks to answer these questions.
PLPD refers to “Public Liability and Property Damage”. It usually refers to the minimum state required liability limits of auto insurance on a vehicle. In Michigan it is $20,000. This coverage offers third party coverage for bodily injury but offers no coverage for vehicle damage if you are in an accident. If you only have PLPD, and no other coverages like collision or comprehensive, then insurance will not pay for the vehicle damage to your car.
Instead, because Michigan is a no-fault state, a vehicle owner is responsible for insuring his own vehicle for vehicle damage. If a vehicle is damaged in an accident, a vehicle owner turns to his own insurance carrier to pay for the damage, not the person who caused the accident. In Michigan, typically there are two types of vehicle damage coverages – collision coverage and comprehensive.
Collision coverage pays to replace or repair a vehicle involved in an accident. This is what most people call “full coverage.” Collision coverage does not pay for damage to other vehicles. Usually there is a deductible that must be met before an insurance company will pay a collision claim.
Collision coverage typically pays for car damage as long as it doesn’t exceed your car’s actual cash value. This is the car’s original purchase price or equity value minus depreciation.
Comprehensive insurance is another optional coverage. It covers damage not from a collision, but from damage due to theft, hail, fire, vandalism and glass damage. Again, this is separate from collision coverage and usually also has a deductible that must be met.
Now, you can sue the at-fault driver for damage to your vehicle. However, there are strict limitations on this. First, the most you can receive is $500, an amount that has not increased since the 1970s. Second, you are only entitled to this amount if the other driver is more than 50% at-fault for causing the accident. There is one caveat though. If the other driver that caused the accident is uninsured, there is no limit to how much you can recover for vehicle damage. This means in theory you can collect the full amount of vehicle damage.