Insurance 101: What is Property Damage Liability?

#PROPERTYDAMAGE

Class is in session.

You're pulling out of a parking spot at the grocery store and accidentally ding someone's bumper. Who pays for this?

The answer can be found in your property damage liability policy.

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What is property damage liability?

Required by law in most states, property damage liability can help soften your financial impact if you're at fault for an accident that damages another person's vehicle or property. It will typically cover the cost of repairs or the replacement, up to the limit in your policy.

Property damage to another person's car, home, place of business, and even public or government property are usually covered.

However, property damage does not cover damages inflicted to your own vehicle and so it is good to consider other coverage options, such as collision coverage.

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What could be covered with property damage insurance?

Property damage covers two main types of damages you cause:

Another person's vehicle:

You accidentally dented someone's car while trying to squeeze into a small parking space
You caused a collision that totaled two driver's vehicles

Property damage liability can pay for vehicle damage, including repairs or replacing someone's vehicle if it's considered a total loss... but remember, your coverage is only up to the limits of your policy.

Another person's property:

A deer leapt in front of you and you swerved to avoid her, smashing into someone's fence
You accidentally crashed into your neighbor's tree and lamppost
You damaged the parking structure after you put the car in "drive" instead of "reverse"
You rear-end someone's car while in traffic

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What are examples of what WON'T be covered with property damage liability?

When the cost of damages exceeds the amount of your coverage, you'll be responsible for paying the difference
You hit a deer and cause damage to your own car (this is comprehensive coverage)
A driver gets injured from an accident you caused and now needs rehabilitative therapy (this falls under bodily injury liability)
You get injured in an accident you cause (this may fall under PIP)

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Any exceptions to property damage liability claims?

Yes, as with all insurance, there are pretty standard exceptions throughout the industry. One example is that no policy will protect you for damage intentionally inflicted.

Always read your policy for a comprehensive understanding of the coverage you select.

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How can I protect myself from higher cost damages?

Like all insurance coverage, if you select a higher limit, you'll be covered for a higher amount if you're in an accident. But this will also mean your insurance rate will be higher as well.

One way to bring insurance costs down is to select an insurer with great rates. Enroll in Novo Drive which can bring rates down even further for safe drivers.

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Must I buy property damage liability coverage?

Check your state's requirements, as driving without liability coverage is illegal in most states... penalties include high fees, loss of a license, and even jail time.

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Bodily injury liability vs property damage liability

These two coverages often get grouped together in the umbrella term of "liability insurance." Liability insurance protects drivers from liability for accidents that they caused. Thus, liability insurance helps pay for damages the at-fault driver has caused.

Simply put, bodily injury coverage is about the body while property damage is about issues that arise from property.

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Do I need BOTH property damage liability and bodily injury liability?

Officially, this will depend upon where you live and the laws that have been designated in your state. Typically, most states require you to carry both of these coverages.

If it is not mandated, then purchasing it will be up to you.

Repairs can be costly, even when the property is not a total loss. The average car costs $48,000. And an accident can involve more than one other car, as well as other types of property.

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