• What is Property Damage Coverage and How Much Do I Need?

    The issue of property damage coverage for an auto policy can be confusing to some drivers. Although some might think that property damage coverage refers to protecting your own car or truck, the way it is commonly used, property damage coverage refers to part of a basic liability package for covering other people’s cars.

    Basic Liability Insurance

    Basic liability insurance is mandated by each state where a driver registers a vehicle. Any driver needs this coverage to be legally on the road, since it covers damage that may occur as a result of an accident caused by that policyholder. This liability insurance usually comes in a set of three numbers such as 100/500/300. These numbers correspond to levels of coverage (in the thousands of dollars). Two numbers correspond to personal injury amounts. The third is for the property damage coverage.

    So How Do I Cover My Own Car?

    Where drivers are forced to pay property damage coverage for others, insuring your own vehicle for property damage is optional. That means if your vehicle is so old that it isn’t worth getting fixed, you don’t need to pay for covering it. The type of insurance car owners use for property damage coverage is called collision or comprehensive insurance.

    Other Kinds of Property Damage

    Consult a property damage attorney for more on covering your assets. Drivers can purchase uninsured motorist coverage for covering their property loss from a crash caused by an uninsured driver. They can also get theft and vandalism coverage according to damage law in auto policies. Look into the various policy additions that will protect your investment in a newer car or truck.

    How Insurers Give Property Damage Coverage to Drivers

    Most insurers value liability coverage with a series of three numbers, such as 5/25/5. These numbers represent amounts of coverage in thousands of dollars. The first two numbers are for bodily injury, or how much your insurer will pay out if you hit someone and cause injury. The third number is for covering damage to other vehicles in an accident you cause.

    How Much Property Damage Coverage Do I Need?

    As shown above, some state mandated liability has limits for property damage as low as $5,000. However, in an accident, this will hardly cover damage to most new vehicles, and chances are the other parties will approach the at-fault driver to collect the rest. That’s why the choice of setting property damage coverage has to do with each driver’s specific situation. A driver who really wants to be fully covered will choose amounts like $25,000 or $50,000. Other drivers who want to keep premiums down may select something like $10,000.

    Every driver has a choice in how much liability insurance they want. The key is to know what you are buying, to be educated about your true coverage, so that when claims happen, you’re on top of the situation.