Property damage responsibility covers repair or replacement costs for another person’s car and items (such as a fence or lamppost) when you are at fault in an accident. This coverage is typically a separate limit within your policy, in addition to bodily injury and comprehensive/collision limits. You can purchase higher property damage liability limits depending on your state’s minimum requirements and preferences.
Coverage Limits
Suppose you cause property damage to another person’s car, home, business or anything else that can be physically touched (not covered by health insurance or workers’ compensation). In that case, property damage liability helps pay for their expenses. This type of coverage typically has lower limits than bodily injury liability, but higher limits are available. Nationwide, most states require some form of property damage liability insurance. Minimum limit requirements vary by state but usually range from $5,000 to $25,000 per accident. If your accident-related property damage costs exceed these limits, you’re responsible for the rest, potentially risking your assets.
Say you’re driving down the road when you hit the back bumper of a stopped vehicle. Property damage liability may cover repairs up to your policy’s property damage limit. It won’t, however, pay for funeral costs or any lost income. For that, you’ll need optional coverage like collision and comprehensive.
Deductibles
Your auto liability insurance Newark DE property damage liability section protects other people’s automobiles and property (such as fences, mailboxes, and storefronts for businesses) if you cause an accident. Your policy may also include optional coverage types like collision and comprehensive. Most states mandate that auto owners maintain property damage liability insurance at a minimum. Say you swerve to miss a deer and crash into your neighbor’s parked car. Up to your maximum, your property damage liability insurance would cover restoring your vehicle.
Your policy may contain a dollar amount or a percentage deductible, calculated as a percent of your policy’s reported loss value. A dollar amount deductible will be subtracted from any claims you receive, so if you have a $500 deductible and experience a $10,000 insurance loss, you will only get a claim check for $9,500.
Co-Pays
If you’re found to be at fault for an accident that damages someone else’s property, this coverage pays for their repairs. It covers structures like fences, lamp posts, and debris removal costs.
The only caveat is that you’ll be liable for expenses exceeding your selected limits. That’s why it’s important to choose higher limits. Unlike Bodily Injury Liability, which is part of your Liability coverage, Property Damage only applies to damages to other people’s property, such as their car. Generally, these expenses are lower than medical bills or lost wages, but they add up quickly and can easily surpass your coverage limits. It’s important to track any costs incurred, including those for a rental car, and submit them to your insurance provider as soon as possible. That way, you’ll be reimbursed as quickly as possible. Also, consider purchasing a Personal Umbrella Policy to help pay for any remaining expenses you’re responsible for.
Exclusions
Certain types of property damage may be excluded from coverage depending on the business. For instance, if you work as a piano tuner, property damage liability would not cover the cost of replacing expensive instruments that you might damage during an onsite inspection. A CGL policy excludes “damage to property loaned to you.” Similarly, exclusion j, k, and, to some extent, l of the standard ISO form eliminate coverage for risks related to defects in an insured’s work or product, which they are expected to stand behind and warranty commercially. Consider a builder who self-performed the construction of a house, and when completed, a major rain storm caused the roof to leak and cave in, ruining wood flooring on other floors. Damages brought on by the discharge, dissemination, release, or escape of waste materials, acids, alkalis, poisonous chemicals, liquids, gases, smoke, fumes, soot, or other irritants or contaminants are another typical exclusion. However, several courts have ruled that these exposures are excluded when the release is intentional or negligent rather than accidental and unforeseen.
