Anyone owning a car in Michigan has made the decision between full coverage compensation and Personal Liability and Property Damage (PLPD). Sometimes, the decision is made for them. Many people still don’t know the difference between the two, even though it is important to know which is best for you.
Most people know there is a difference in price (PLPD is cheaper), but a lot of people are still confused about what the other differences are. We’ll explain what each insurance plan covers, starting with PLPD.
PLPD is the basic plan that every driver is required to have, unless they opt for a more advanced plan. It is the least expensive, but it only covers liabilities and property damages. This means that if you were to get into an accident with only PLPD insurance, then all repairs and replacements to your vehicle will need to be paid out of pocket. This can mean that an accident with only PLPD insurance is very, very expensive. The specific areas PLPD covers are as follows:
- Personal Injury Protection: injuries you sustain in an accident
- Residual Body Injuries: or coverage for accidents in which you are found at fault
- Property Damage Liability: coverage for damage to personal property.
Full coverage is more extensive. However, don’t be fooled by the name. It does not cover all eventualities of an accident, just more than PLPD. In a nutshell, it is extended PLPD coverage, often with more amounts for each of the areas listed above. Some other things typically included in full coverage are:
- Comprehensive Coverage: This is coverage against damage outside of traffic accidents, such as fires, falling trees, theft, and natural disasters.
- Collision Coverage: This is protection against collision with another vehicle. The amount provided varies with the policy.
Another key difference to note is how fault works into coverage. If you have full coverage and your automobile is damaged in an accident, then you do not need to prove to anyone that the other driver was at fault. It does not matter whose fault the accident was- your insurance company will owe you compensation.
Due to the great difference in coverage, it’s easy to recommend full coverage to anyone who can fit it in their budget. While PLPD insurance may be cheaper, an accident will be extremely expensive. Therefore, it’s much better to rest assured that your car is fully insured.
All in all, it’s important to know the difference between different insurance policies. While PLPD may be cheaper, it may end up costing you a lot of money in the event of an accident. Carefully examine different policies before deciding on one. It could very well be worth your time, as selecting a incomplete policy could be very costly down the road.