What Is Personal Liability and Property Damage?

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A commonly abbreviated car insurance term is PLPD. “PLPD” stands for Personal Liability and Property Damage — but knowing what it stands for and knowing why it’s important are two very different things. Understanding this coverage type will help you navigate your own insurance decisions, keep you knowledgeable about what is covered in an at-fault accident, and can even protect you in the event that you are in an accident caused by another driver.

PLPD is a vital and important part of every drivable vehicle’s insurance coverage, and PLPD coverage is the bare-bones legal minimum coverage in a lot of states. Knowing what PLPD covers and what it does not cover can save you a lot of confusion and hassle if you are ever in an accident. A better understanding of the coverage can also save you money on insurance.

PLPD is sometimes broken down into two distinct categories of coverage: PL, the personal liability component, and PD, property damage coverage. For either type of coverage to kick-in, you generally have to be the at-fault party in the accident. As the name implies, this means the accident — whether with another driver or an inanimate object like a lamp pole — has to have been caused by your own error.

You will not be responsible for paying the deductible when either personal liability or property damage coverage kicks in. However, if you are determined to be at-fault in an accident, your insurance rates are sure to go up.

PL = Personal Liability

PL can also be referred to as Bodily Injury coverage. Being negligent or at-fault in an accident makes you liable for the damages you caused. Personal liability can cover the other driver’s injuries, pain, and suffering — or that of their passengers — if you are found to be at fault.

Liability coverage is often written as a fraction, like 20,000/40,000, on your insurance policy. The first number (the numerator) in the fraction is the maximum amount to be paid out per person. The second number (the denominator) in the fraction is the maximum to be paid out per accident. If multiple people are injured in an accident, it is first-come, first-serve — meaning whoever files a claim first has the first opportunity at being covered up to the stated limits. That means that if you’re in an accident caused by another person and you become injured as a result, you shouldn’t dilly dally in filing a claim.

Maximum Amount Paid Per Person / Maximum Paid Out Per Accident

It’s important to understand the maximums on your insurance card and what they will mean for the reality of your financial situation if you get into an accident. While the maximums are the ceiling for what the insurance company will have to pay, individuals that are injured as a result of your driving can also try to hold you accountable for more through taking you to civil court.

Example: John is texting and driving, and he does not realize the light turned red. He rear-ends another vehicle with four passengers. All four passengers sustained minor injuries. John's personal liability limits are 100,000/300,000. Each passenger goes after John's insurance company for $20,000 apiece for pain and suffering. Each is awarded a settlement because John was found to be at fault and the amount pursued falls within the guidelines of less than 100,000 per person and not more than 300,000 per accident. If the limits are exceeded, the claimants can go after John personally.

Example: Assume a similar scenario as above yet John t-bones another vehicle going through the intersection. Four passengers are very seriously injured. John's personal liability limits are 100,000/300,000. Each passenger goes after John's insurance company for the maximum to be paid out of $100,00 for medical expenses and pain and suffering. The problem is, his policy will only cover up to $300,000 for the accident. Four people hurt each wanting 100k adds up to $400,000. It is just an example, and it could be worked out in multiple ways. The fourth injured party to file a claim could potentially be left with no chance to collect from John's car insurance policy. John does not have enough coverage to cover the damages and could possibly be sued and held personally responsible.

Personal Liability Key Points

  • Coverage is for the other party, not you.
  • State minimum limits vary, so check with your insurance representative.
  • Preferred limits are 100,000/300,000.
  • Need higher limits? Check into an umbrella policy.
  • Michigan has different rules regarding injuries.

PD = Property Damage

If you cause damage to property with your vehicles, such as another vehicle, street sign, mailbox, or anything else for that matter, coverage will be provided under property damage. Accidents do happen, so property damage is included in all vehicle insurance policies. The coverage is typically displayed right along with personal liability 100,000/300,000/100,000. The last 100,000 is the property damage limit.

Example: John hits a patch of ice and slides into a parked vehicle on the side of the road. Damage to the parked vehicle will be covered under the property damage coverage on his car insurance policy. The vehicle will be repaired with no deductible.

Property Damage Key Points

  • Covers property to others damaged by your vehicle
  • State minimum limits vary, check with your insurance representative.
  • Standard limit 100,000
  • Additional Coverage (not for all states)
  • Mini Tort or Limited Property Damage
  • Personal Injury Protection
  • Accidental Death Coverage
  • Property Protection

Anyone that is taking the time to read through their insurance policy is at risk of getting a headache. Industry jargon and complicated phrasing make looking through a policy nearly impossible for an average driver. If you are not dealing with insurance terminology on a daily basis, it is extremely tough to stay on top of the legalese. But now, next time you hear the phrase PLPD, you'll know exactly what the coverage is and how it protects you.