Auto Insurance Coverage Series
Auto Insurance consists of different coverage parts rolled into one contract. Almost all states require liability coverage to put a car on the road. Financial responsibility laws establish a minimum limit of liability for two components. Bodily injury and death claims have a coverage part and so does car insurance property damage.
Car Insurance PROPERTY DAMAGE: “physical injury to, destruction of or loss of use of tangible property”.
Of course, the policy does narrow it down to property damage resulting from an auto accident in which an insured becomes legally responsible.
Coverage includes defense expenses incurred to defend an insured. Car insurance property damage also pays defense expenses associated with a property lawsuit. The limits of insruance will not be reduced by these expenses. Defense expenses in car insurance property damage prove time and again to be a very valuable benefit. However, limitations and exclusions exist.
The policy covers persons considered to be insureds. Definitions exist in the policy. The definition of an insured includes the following parts. In general an insured includes the named insured, resident spouse, resident family members (blood, marriage, adoption, ward of state) and people using your vehicle with your permission. Vicarious liability includes coverage for others responsible for the actions of an insured, such as an employer or a charitable organization.
The coverage only applies to vehicles on the declarations page, newly acquired autos (with limitations), substitute vehicles and trailers.
Property damage to property owned or being transported by anyone considered an insured
Property damage to property rented, used by or in the care of an insured (however coverage is given back for property damage to a residence or private garage).
For New York insureds, coverage is also given back for rented trailers if damage to the trailer is assumed by the insured in a contract, up to $2,000.
The exclusions mentioned in the Bodily Injury post also can apply here as well.
LIMITS OF INSURANCE
Two types of limits are available. Split limit (max per person/max per accident/property damage) or a combined single limit or CSL. Split limits are more common. However many insurance companies offer a combined single limit option. The CSL will cost a bit more because the the only maximum that applies is the per accident amount. This can be very handy for accidents that have varied injury or property damage awards.
The driver and how they drive the vehicle determine the premium. Rating categories include pleasure use, to and from work and business use classes. These categories impact the rate because of frequency of use. More insurance companies offer pay as you go models or usage based models that track driving behavior. Behavior determines discounts from a base rate. These programs seem to vary by company but could be a good alternative for some people.
Tips mentioned in the Bodily Injury post still apply. However, losses due to property damage are not always vehicles. We all know the cost to repair vehicles has increased substantially. But what about guardrails, telephone poles, fences, trees and buildings? These all count and can add to a property damage claim in a hurry.
Insurance is a legal contract. Good advice is not expensive. Shop Prepared!