Our belief is you should “Understand your coverage…before you have a loss”. While we always recommend that you speak to a licensed professional, we recognize that it is not always easy to reach someone that can explain your policy in easy-to-understand terms. This is the second of a 4-part series to learn how to assess if your current Auto insurance meets your needs.
Following up last week’s article about Bodily Injury Liability coverage, this week we will discuss Property Damage coverage. This is also a “Liability” coverage, and it will pay for damage you cause to the property of someone else. For example, if you cause an accident and you damage someone else’s vehicle, this coverage pays for their repairs. Similarly, if you cause a “chain reaction” accident, this is the coverage that will pay for the repairs to all the other vehicles.
Property Damage coverage is not limited to damage to other vehicles. If you hit a mailbox, light pole, a fence, or a building, Property Damage is the coverage that would pay on your behalf. To take it one step further, if you caused an accident and damaged cargo being carried by another vehicle, your Property Damage would also cover the damaged cargo.
Property Damage Liability is usually shown as its own line item on your Auto policy and will look like:
Property Damage $100,000 per accident
The limit shown ($100,000) is the maximum amount coverage you have for the damage you cause in a single accident; regardless how many vehicles are involved or how much damage you cause.
With so many expensive cars on the road, it’s important to have enough coverage if you damage a higher-end vehicle. As a result, we recommend a minimum of $50,000, though prefer our clients consider $100,000 or more. Most insurance companies offer up to $100,000 and the cost difference between $50,000 and $100,000 is not significant. If you want higher limits and your company does not offer them, you can also add an umbrella policy. (see our recent post about umbrella coverage).
We also offer a free online calculator to help you determine how much of a financial exposure you would have to a large liability loss. Additionally, we offer complimentary reviews and are willing to answer any questions you have about your coverage.