property damage liability

Auto Liability Limits

Tom Wallace Auto Insurance

Property Damage Liability

Not long ago a local bakery suffered a loss to their store, The cause, a vehicle crashed through the storefront. The driver’s property damage liability limits become very important.

Property damage liability limits often pay for damage to vehicles, however that is only part of the story.

Other Types of Property Damage

The bakery and landlord have much to think about. The owner of the shopping plaza will have a claim for building damage. The owner of the store will have a claim for damage to the interior, business equipment, inventory, lost revenue and payroll for the weeks they cannot operate.

Fortunately, there were no injuries but imagine if there were.

We have seen claims for guard rails, telephone poles and wires, mailboxes and living rooms (yes, living rooms).

How much do you think it costs to replace a telephone pole or a guard rail, a lot.

Split Auto Liability Limits

Often auto liability limits set as a split limit. First split is as follows:

  • Bodily Injury
  • Property Damage

Bodily Injury has it’s own split:

  • Per Person
  • Per Accident

Property Damage Gets No Respect

Low property damage limits are common. Unfortunately a common tactic of direct writer insurance organizations is to cut corners on property damage limits recognizing that many buyers will switch for small amounts of savings.

Let’s go back to the store and the landlord. Each will file a claim with their insurance company who will likely pay for:

  • Debris removal
  • Boarding up the storefront
  • Lost store revenue
  • Payroll
  • Repair of the storefront
  • Lost inventory
  • Replace business equipment damaged
  • Advertising costs for reopening and
  • Lost revenue after opening (compared to last years figures)

The driver at fault will file a claim and their insurance will be paying back the other insurance companies that paid the bakery and landlord.

Check Your Property Damage Limits

Replacing property can be complicated and expensive. Driving around with $25,000 or $50,000 in today’s world, is simply not enough.