A standard auto policy will include property damage liability as one of the coverages. The majority of states in the U.S. require drivers to have at least some coverage for property damage liability before they can drive legally. Property damage coverage is an integral part your car insurance policy.
“Property Damage Liability Coverage is required whenever there is a chance that something you own, or an activity that you perform causes damage to another party’s property,” says Jaime Arias. Jaime is a licensed property-casualty agent and a Partner at AutoInsureSavings. This is the auto insurance portion that covers repairs to another driver’s vehicle in the event of an accident. It also covers damage to other types of property, such as signsposts and any type of physical property that is within the policy limit.
While most car insurance providers offer coverage for property damage liability, it is still important to fully understand the details of this auto insurance coverage. Property damage liability insurance can pay for the repair of damages caused to property by you if you are at fault in an accident.
What is the definition of property damage liability coverage?
Property damage liability coverage covers you for any damages you cause to another vehicle or person. This covers damage to other vehicles, but property insurance can also cover damage to stationary objects, such as signs, buildings, fences, or other property.
“Your property damage coverage will have a specified limit,” explains Brandon Yosha, a personal injuries lawyer at Yosha Cook & Tisch. “Your insurance will cover damage done to property of another person up to a certain limit. If you exceed that limit, your insurance policy would require you to pay the extra damage.
The insurance coverage limits are typically written in a series of three numbers separated with slashes such as 100/300/50. This abbreviated form of coverage means that $100,000 is bodily injury coverage per person, $300,000.00 in bodily injuries liability per accident, and $50,000 for property damages liability. The last number in the sequence is property damage liability coverage. You will generally pay more to have higher coverage limits.
What is the coverage of property damage liability insurance?
Insurance that covers property liability provides protections that are activated if you are responsible for an accident. Most property damage coverage covers:
- The other vehicle: In most cases, your auto insurance company will pay for any damage you do to another vehicle. This includes labor and parts.
- Property damage liability for objects outside your vehicle: This includes damages to property such as fences, signs, or buildings.
- Contents of the other car: Your property damage coverage may cover personal property that is damaged in an accident, such as a seat or car seat.
It may be obvious that your coverage for personal property is not available. You are only responsible for the damages you cause others. You will need collision and comprehensive coverage to protect your vehicle from damage. Your homeowners or renters insurance would usually cover any items in your car that have been damaged in an accident at fault. However, the policy would normally be subject to the deductible.
What amount of property damage insurance should you buy?
Each state has its own minimum requirements to insure their cars. In most states, a minimum amount of property damage coverage is required.
“Almost all, if not all, insurance policies include coverage for property damage to other’s properties,” states attorney John R. Gorman. He is a Partner and Personal Injury Lawyer at Lutz Shafranski, Gorman & Mahoney. “If an auto collision occurs, your auto insurance’s coverage will cover the property damage done by the other party.” You should have as much property damage coverage as you can afford. If you damage an expensive vehicle, you could lose your assets.
You might want to purchase higher limits for property damage liability insurance than the minimum state requirement. You are responsible for any excess damages that exceed your policy limit if you cause an accident. This could lead to financial stress. Talk to your agent before you sign your auto insurance policy. Ask about the right amount of property damage coverage.
How to file a property-damage liability claim
You can file a property damage claim with your insurance company if you cause property damage and you don’t want to pay for the damages.
E. Nathan Harris is the managing partner of Abogados Central Legal. This personal injury law firm in Birmingham, Alabama illustrates a potential claim for property damage. He said, “Imagine that you’re driving and the car in front of you stops at red lights. You couldn’t stop in enough time to rear-end it.”
These tips can help you resolve an accident as quickly and easily as possible.
- You should file a police investigation if you’re involved in an accident. Although insurance companies don’t usually require police reports, such reports can help you document your information as well as that of the other driver and the details of the accident.
- Photograph the damage. It is easy to forget details after an accident. You can help keep track of the damage by taking photos and making notes as soon as possible.
- Notify your insurance company about the accident as soon as possible. This will allow your insurance company to begin the claims process. This can be done by calling your insurance agent, your insurance company directly, or using an online claim tool or app.
Harris suggests that you gather the following information for your insurance company to use:
- The accident date
- An account of the accident
- Personal information such as date of birth and driver’s license number
- Information about your vehicle
- Information about the other party
- Information about the vehicle of the other party
You will most likely speak with an adjuster after your claim has been filed. This person will help you with any questions and handle your claim. The adjuster will assess the damage to property caused by you to the other party, and make the necessary payments to fix it.
If your vehicle is damaged and you have the correct coverages, your adjuster will review the damage and make payment to repair the vehicle.
Property damage liability and umbrella policies
An umbrella policy is a policy that provides liability limits greater than the ones offered by your auto insurance company. An umbrella policy can provide additional liability coverage to your other policies such as your auto insurance policy or your home insurance policy.
Harris explains that this policy has many benefits. It not only protects you but also protects your family members and household members in case they are at fault for an accident.
You can get umbrella insurance that covers you for personal liability, injuries and property damage.
Yosha says that an excess policy, also known as an umbrella policy, can be obtained to cover additional damages not covered by your standard policy. For example, if you hit a building and caused $100,000 damage, with a $50,000 property damage limit and a $200,000 umbrella then your automobile insurance would cover $50,000 of the damage. Your umbrella would cover $50,000. You could be held personally responsible for $50,000 if you didn’t have an umbrella.
Your insurance company might require you to have a minimum amount in coverage on any underlying policies that you own, such as $100,000, to be eligible for an umbrella policy.
Questions frequently asked
Do I need property liability insurance?
A lot of states require you to have minimum auto insurance. The minimum amount of property damage liability insurance is usually included in this requirement. The amount that you must carry will depend on where you live and what your rating factors are. A licensed agent can help you determine the right level of coverage for your needs.
What is not covered under property damage liability insurance
Property damage liability insurance does NOT cover all property, despite its name. Property damage liability insurance doesn’t cover your vehicle or property. You will need to file a claim under either your comprehensive or collision coverage in order to cover your vehicle. You will need renters or homeowners insurance to protect your personal property if it is damaged in an accident.
