What Does Property Damage Pay For?

Are you trying to learn what may be covered by your property damage liability? Or how much coverage should you have for your car insurance? You will know all the details by the end of this article.

Are you trying to learn what may be covered by your property damage liability? Or how much coverage should you have for your car insurance? You will know all the details by the end of this article.

What exactly is property damage liability coverage?

This part of your car insurance policy will pay for damage done by your vehicle when you hit something that does not belong to you. Some examples are:

  • You hit your neighbor’s mailbox.
  • Your vehicle backs into another car.
  • Your quick reflexes allowed you to swerve, preventing a deer from being hit, only to take out a telephone pole.
  • It’s a snowy day, and you sideswipe a guard rail causing damage.

Your property damage liability coverage will pay for the repair or replacement of this damaged property up to the limit of your insurance policy. Most states have a minimum amount of property damage coverage in your policy, and New York State is on that list.

The minimum amount in New York State is currently $10,000 per accident. If the damage to repair or replace is less than $10,000 for a single accident, then your policy has enough protection. But what happens if the cost exceeds the amount of $10,000?

The short answer is, “You have a problem, and potentially a large problem.” If an accident is your fault, and the repair or replacement cost exceeds the coverage you have in your policy, you can be sued for the difference.

Here is an example: Vehicle A runs a stop sign and runs smack into the side of Vehicle B, which is less than a year old and was worth $30,000 before being hit by Vehicle A. Vehicle A only had the minimum coverage of $10,000, so the owner of Vehicle B sues the owner and/or the driver of Vehicle A for the $20,000 difference (legal costs are not included in the limit, the total amount of property damage coverage is available to pay for the repair or replacement).

In this example, the Vehicle A owner will need to pay $20,000 out of pocket, or a judgment will be placed against them. The judgment may cause wages to become garnished. You are strongly encouraged to increase the amount of property damage liability coverage to be much higher than the state minimum. In our opinion, everyone should have more than the state minimum.

The next logical question would be, “How much coverage should I have?” That one is a little harder to answer within this article because each household’s wealth and family dynamics are unique. However, you may be surprised that the cost difference is far from budget-busting.

Please note that this coverage will not pay for your vehicle if it gets damaged in an accident. The property damage portion of your policy only pays for other people’s property. What part of your policy will provide coverage if your vehicle is damaged in an accident? Believe it or not, New York State does not require you to include any coverage protection for property you own, only to protect the property of others.

For more information about the part that actually protects your car, read the article Comp vs. Collision. We also have an article on how to get car insurance.

Beyond property damage liability and next steps.

You’ve now become more familiar with how this part of your auto policy works. Keep going, and check out What is Bodily Injury Coverage next.

If you have questions about this topic, feel free to submit your comment below. We love answering tough questions, so don’t hold back. If you’d like to get started with one of our insurance professionals, tap the Get a Quote button below.

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Horan Companies offers comprehensive auto insurance in New York State, including: Baldwinsville, Syracuse, Onondaga County, Liverpool, Fulton and Camillus, NY.