What Does Auto Property Damage Insurance Cover?
Car accidents always lead to unpredictable outcomes. How horrific would it be if your vehicle crashed into someone's business establishment or home? If it’s an at-fault accident, in most US states, you would be liable for the damages done to the third party.
With one accident, you could instantly shoulder the burden of thousands or even millions of dollars. To protect yourself financially, it is crucial to have auto property damage insurance with adequate coverage limits.
In this article, you will learn what does auto property damage insurance cover and what it doesn’t cover. It also explores discussions on auto property damage insurance coverage by state, how much coverage do you need, auto property damage insurance cost, along with the process of filing and claiming auto property damage insurance.
What Does Auto Property Damage Insurance Cover?
Auto property damage insurance provides financial compensation for the damage you cause to another person’s property in an at-fault auto accident. This coverage protects you from high out-of-pocket costs associated with repairing or replacing third-party property.
Typically, auto property damage insurance covers costs associated with damage to:
- Another person’s vehicle: This includes damage to the other person’s car, motorcycle, RV, truck or any other vehicle.
- Another person’s property: This includes both personal and business establishments, and anything in it such as fences, trees, doors, walls, buildings, mailboxes or any other tangible asset.
Throughout the USA, auto property damage insurance is commonly known as property damage liability insurance, or simply property damage insurance. But Michigan has taken it to another level with the PLPD insurance policy. So, what is the PLPD insurance?
PLPD insurance combines personal liability and property damage coverage. While the personal liability component covers medical costs, the property damage component has the same as standard auto property damage insurance. So, if you live in Michigan, then the auto property damage liability will be covered with your PLPD insurance. And, if you’re residing in other states in the USA, you will have to go for standard auto property damage insurance.
What Auto Property Damage Insurance Does Not Cover?
Auto property does not cover the damage to your vehicle, or any of your personal property during an at-fault car accident which you’re partially or totally responsible for. So, if you get involved in an at-fault motor vehicle accident then you will not get any financial compensation for the damage to your vehicle, house, or any other property.
The auto property damage insurance has been specifically designed to protect you financially by compensating the other driver, or any other third party who has been harmed and affected by the accident in which you’re at-fault.
Apart from that the damage due to natural disasters like floods, rain, earthquakes, tornadoes among others are not covered by the auto property damage insurance. Plus, any damage due to theft, robbery and vandalism is not covered by the auto property insurance policy.
Auto Property Damage Insurance Coverage by State
Based on auto insurance laws in the USA, it is legally mandatory for you to have auto property damage insurance to own a vehicle and drive it on the streets. Although there’s exceptions include New Hampshire, and Virginia. New Hampshire is the only state where auto property damage insurance isn’t mandatory, and in Virginia you can opt out by proving that you’re financially capable and responsible of covering the damages after an accident.
When it comes to auto property damage insurance, you’re required to get the minimum coverage depending on the state that you’re residing in which is entailed in the following table.
Minimum Auto Property Damage Insurance Coverage by State
Source: InsuranceInformation Institute
How Much Auto Property Damage Insurance Coverage Do I Need?
When it comes to determining auto property damage insurance coverage, you will have to at least purchase the minimum coverage required by your state. But you can also opt to purchase a higher limit compared to the one imposed by the state.
The minimum property damage insurance varies by state. For instance, if you’re residing in Michigan then you will have to purchase a minimum auto property damage coverage of $10,000. As PLPD insurance is mandatory in Michigan, it will also include the personal liability coverage of $50,000 for bodily injury per person, and $100,000 for bodily injuries per accident.
If you’re residing in California, Massachusetts, New Jersey, and Pennsylvania then you can purchase the minimum auto property damage coverage of $5,000. On average the minimum auto insurance coverage varies from $10,000 to $25,000 in most states in the US.
Even though it’s cheaper to go for the minimum coverage, it is recommended that you opt for higher limits, this is especially because the minimum coverage is often heavily inadequate to cover the required financial compensation for property damage.
Let’s say you have purchased the minimum auto property damage insurance coverage of $10,000, and you run into an at-fault accident and the damages total to $50,000. In that case, you will have to pay a high out of pocket expense of $40,000. Based on the situation and the actual cost of the damage, it can be much more.
So, to stay on the safe side, it is highly recommended that you consider purchasing a higher auto property damage insurance coverage. If you’re not sure how much coverage is adequate for you, you can consult with an auto insurance agent, or you can contact us as well.
How Much Does Auto Property Damage Insurance Cost?
According to the National Association of Insurance Commissioners, the average auto property damage insurance cost is around $650 per year. The cost of auto insurance can significantly vary depending on multiple demographic factors such as age, gender, location, license status and more.
As there are several factors involved in determining the cost of auto property damage insurance, the best way to estimate it is based on the average cost in a particular state. For instance, the average cost of auto insurance in Michigan is $1,491. So, people in Michigan are spending roughly between $149.10 and $298.20 per year for auto property damage coverage.
The average cost can significantly vary based on the state that you’re located in. The annual average cost of auto property damage is the lowest in North Dakota, which is $312.3 a year, whereas it’s the highest in Louisiana amounting to $1,023.91 a year.
How to File and Claim Auto Property Damage Insurance?
Filing and claiming auto property damage insurance is pretty easy, and it’s a straightforward process. Although it’s simple, it’s essential to follow proper steps, especially to ensure that you are covered in a timely manner.
- Collect Evidence: If you have an active CCTV camera in your premises, then review the footage to collect evidence of the motor vehicle accident. Or use your phone to capture photos and record videos of the property damage regardless of whoever is at-fault.
- Call the Police: Its crucial to report the auto accident to the police immediately, so that they can come and investigate and determine who’s at-fault of the accident. Plus, your auto insurance company will go through the police report to verify your claim and determine whether you’re eligible for the insurance coverage.
- Talk to the Other Driver: It is important to take the statement of the other driver, while you are at it take notes. Also politely ask for their name, phone number and contact details, so that you can provide it to your insurance company and get in touch with the other driver in the future.
- Contact Your Insurance Company: Contact your auto insurance company as soon as possible and provide all the information that you have. The company’s agent will guide you through the claims process which you can either do virtually using their app or website. Or you can even visit their office to file and claim the insurance in-person.
Bottomline
Accidents don’t happen every time, there are times we are oblivious to the stern belief that we wouldn’t run into one. But if you do, and if you’re the one at-fault, then it can bring a heavy financial burden. So, to protect yourself both legally and financially it is crucial to have auto property damage insurance.
The auto property damage insurance will specifically protect you financially by covering property damage to the other driver, or any third party harmed by a motor vehicle accident that you’re responsible for.
If you’re residing in Michigan, then it’s mandatory to get the PLPD insurance which includes the auto property damage coverage. So, if you have any questions, or if you’re interested in PLPD or Auto Property Damage Insurance please contact us to get a free quote today.
FAQ
What does property damage cover in auto insurance?
Property damage covers the financial compensation to the other driver, or any third party harmed/affected in which you are at-fault. It typically covers property damages for the other person which includes vehicle, house, fence, trees, mailboxes and other tangible assets.
What coverage is included in an automobile insurance policy that covers property damage?
The property damage insurance policy is particularly a component of the liability coverage, that’s why it’s commonly known as the property damage liability coverage. In Michigan, the automobile property damage insurance policy is a part of the PLPD insurance which combines personal liability and property damage policies.
What is not covered by property insurance?
Your own vehicle damage or property damages are not covered by the auto property damage insurance, it just covers the other person affected/harmed by an auto accident in which you’re at fault. Also, it does not cover damage due to natural disasters, robberies, vandalism or theft.
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