Most of my clients have a pretty good idea of what Property Damage liability coverage is on their car insurance policies, but they're sometimes unsure of how much to carry. I will briefly discuss what Property Damage is and how much you should carry.
Property Damage is fairly simple to understand, but still important. Property Damage covers any property damaged by you in the event of an accident that is your fault. If you were to hit someone, and the accident is your fault, the Property Damage coverage will repair or replace the vehicle that you struck up to the limit you carry on your insurance policy. Property Damage is not an optional coverage; the state requires you to carry it. The Property Damage limits available are $10,000, $25,000, $50,000 and $100,000. Most experts recommend at the very least $50,000, but I think 100,000 is the safest. (Florida's Property Damage minimum limit is $10,000.)
Property Damage doesn't just cover vehicles. If you were to lose control of your car and knock down someone's fence or even hit their house, Property Damage will pay to fix those damages, too. That's why it is called Property Damage and not just 'vehicle damage'.
One of the biggest misconceptions that I hear regarding Property Damage is when my clients think that it covers their own vehicle. It does not! Property damage is paid to fix or repair someone else's property that the policyholder has damaged as a result of an accident that is their fault. Coverage to repair or replace your own vehicle would be covered under Comprehensive and Collision Coverage, which is different from Property Damage. (Don't worry, we'll discuss Comprehensive and Collision coverage in a future blog post!)
Although your Property Damage doesn’t actually pay for damage to your property, it is a vital (and required!) coverage. You should now know what Property Damage covers and have an idea of how much you should carry. If you still don’t understand, or you have any additional questions regarding Property Damage, feel free to email me or message me on Facebook or Twitter.
Read part one (Personal Injury Protection) here.
Read part two (Bodily Injury Liability) here.
Read part three (Uninsured Motorist Coverage) here.
Read part five (Other Coverages) here.