What Is Property Protection Insurance For Auto Insurance

In Michigan, property protection insurance (PPI) is mandatory for drivers and is designed to cover liability related to property damage exclusively within the state.

This insurance offers up to $1 million in protection for damages caused to another Michigan resident’s property. PPI can only be purchased through Michigan-based insurance providers and is not offered in any other state. In this guide, we’ll delve into the intricacies of property protection insurance (PPI) for auto coverage, shedding light on how it functions within Michigan’s insurance framework.

What Is Property Protection Insurance
PPI covers accidental property damage from car accidents, required by Michigan’s No-Fault law. Property insurance includes various policies for property protection or liability coverage for different risks: Image source (Forbes)

What is Property Protection Insurance?

In Michigan, car owners must have Property Protection Insurance (PPI), a form of no-fault liability insurance. PPI offers up to $1 million in coverage for property damage in specific circumstances. Should you accidentally damage another resident’s property in Michigan, PPI covers the costs of repairs or replacements.

To obtain a license plate in Michigan, drivers are mandated to purchase PPI. When acquiring car insurance in Michigan, PPI is automatically included. Alternatively, out-of-state drivers in Michigan will see their car insurance adjust to meet Michigan’s minimum insurance requirements, thus providing them with PPI coverage while driving in the state.

What Does Property Protection Insurance Cover?

Property protection insurance extends coverage to damages inflicted upon another person’s property while driving.

Whether it’s denting someone else’s car in a parking lot or colliding with various objects like buildings, fences, trash cans, or street lights, this insurance ensures that the costs for repairing or replacing the damaged property are covered.

Some of the items covered by property protection insurance in Michigan include:

  • Parked vehicles
  • Buildings
  • Fences and poles
  • Mailboxes
  • Streetlights
  • Trash cans

How Does Property Protection Insurance Work?

Property protection insurance is a type of no-fault insurance coverage. Michigan is the only state that requires property protection insurance.

Michigan is one of 12 states considered a no-fault state for car insurance. Because Michigan is a no-fault state, insurance companies pay certain damage in all accidents – regardless of fault. If you’re involved in an accident and the accident wasn’t your fault, then your insurance company may still pay for certain costs up to your coverage limits, regardless of fault.

Most other states require property damage liability coverage, which works similarly to property protection insurance. Michigan is the only state that requires property damage liability coverage and property protection insurance.

Minimum Car Insurance Requirements in Michigan

Michigan has some of the highest car insurance premiums in the United States. They also have some of the most extensive car insurance requirements.

Drivers in Michigan must carry all of the following coverages:

In Michigan, as with all states across America, both collision and comprehensive coverage remain optional.

These insurances safeguard your vehicle post-accident, shielding you from theft, vandalism, storm damage, fire damage, and non-collision-related harm.

Property Damage Liability Coverage vs. Property Protection Insurance

Most states need property damage liability coverage for drivers. It shields others’ property from your damage. But Michigan is unique. It requires both property damage liability coverage and property protection insurance.

What’s the difference? Property protection insurance covers parked cars or fixed property damage. It applies if you hit a parked car or a neighbor’s fence while driving.

Property damage liability coverage, however, handles various property damage types.

It includes out-of-state accidents too.

In Michigan, if your car gets hit, you can only get up to $500 from the at-fault driver.

Michigan doesn’t compensate for fault in-state accidents.

If you drive out of Michigan, property damage liability coverage covers all property damage.

Property Protection Insurance Exceptions: What Does PPI Not Cover?

Property protection insurance covers certain damages in certain situations. However, there are limitations to coverage.

Improperly Parked Vehicles: If you hit a vehicle that was improperly or illegally parked, then you may not be required to compensate the owner of that vehicle.

Damage Older than 1 Year: PPI has a one-year statute of limitations.

Otherwise, property protection insurance covers most types of property damage in Michigan.

Read more: What is property damage liability insurance?

Can I Sue for a PPI Claim?

If your parked car or any other property was damaged by another driver, then the other driver’s insurance company is required to pay for this damage.

Typically, the other insurer will cover your damage, and you deal directly with the other insurance company.

However, if the other insurance company denies your claim, or if the other driver has no insurance, then you could sue for a PPI claim.

When suing for a PPI claim, you name the other driver’s insurance company as the defendant (not the other driver).

If the other driver was uninsured, then you can name the driver or vehicle owner as the defendant in a PPI lawsuit.

How to Get PPI Coverage in Michigan

All car insurance policies in Michigan include personal protection insurance (PPI) coverage. If you’re buying a car insurance policy from a registered insurance provider in Michigan, then your policy already has PPI coverage.

Compare quotes today by entering your ZIP code online. Although Michigan has notoriously high car insurance premiums, you can save money on PPI and other coverage by comparing quotes today.

The Bottom Line

In Michigan, Property Protection Insurance (PPI) stands as a unique form of no-fault coverage, obligatory for all vehicle owners.

PPI safeguards against specific damages inflicted on another’s property, encompassing parked vehicles, fences, poles, and similar items.

When acquiring car insurance in Michigan, PPI automatically integrates into the policy alongside mandatory Property Damage Liability coverage.

Following an accident, claims may be processed through either Property Damage Liability or Property Protection Insurance, depending on the circumstances.

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