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Michigan Auto InsurancePeople always wonder, especially as their cars get older, whether to keep their vehicles on “full coverage” or “PLPD” liability only.  Before we get too far, it’s important to explain what these mean.

“PLPD” or Liability Only - By law in Michigan, vehicle owners are required to carry Michigan no-fault liability insurance.  PLPD is an outdated term but is still referred to widely by people.  A basic policy then includes the state mandated liability for Bodily Injury & Property Damage (BI/PD), Property Protection Insurance (PPI), and Personal Injury Protection (PIP) along with the state assessment for catastrophic claims (MCCA).  These are all required just to get things started.  This combination of basic required coverages is what often is referred to as “PLPD” or liability only.

“Full Coverage” – This is a generic term meaning you have the basic liability coverages, PLUS coverage for damages to YOUR vehicle.  Typically then this means adding Collision coverage for accidents involving other vehicles, and Comprehensive covering other incidents like deer hits, broken windshields, or theft.  Often then items like Roadside Assistance or Rental Reimbursement might get added to this, but aren’t always included, so not all “full coverage” policies are equal.

There are a few other coverages typically included in policies such as Uninsured/Underinsured motorists coverage, or Mini-Tort coverage, to better protect you.  These aren’t required by law but are typically quite inexpensive so are best to always have included.

Some key points then are:

-          Do I want/need to be compensated for damages to MY vehicle in a loss?  If so then you really need “full coverage”.  If you would need help buying that next car if yours got totaled, then “full coverage” is likely for you.

-          Michigan No-Fault means you get nothing in an accident even if it’s someone else’s fault.  Other states typically allow you to collect from the at-fault party.  Michigan does not—you’re only allowed to seek damages up to $1,000, if you can find the at-fault party, so you can’t count on the other party to help you out, even if it was their fault.

-          Know the value of your car.  This is key, since your claim will be settled based on the value of your specific car at the time of the claim.  Then, look at the cost of the Comprehensive and Collision.  Pricing will vary based on many factors—age, driving record, insurance scores, vehicle age, etc.  Then decide if it’s worth the extra cost.

So, a 2005 vehicle worth $3,000 in a claim might only cost one person $100/6 months extra to insure at “full coverage”, which might be worth the added cost.  But, that same $3,000 vehicle might cost a 17 year old driver $1,000 extra at “full coverage”.  So in that case, it quite likely would not be worth the extra cost.

Rule of thumb – compare cost to add “full coverage” in relation to the value of the vehicle.  But remember “full coverage” is not standardized—you’ll want to make sure you have adequate liability limits, not just state minimums, and the extras like Underinsured Motorists, Mini-Tort, or Broadened Collision.  If you have questions about auto insurance in Michigan, please contact us at Hardt Insurance.
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