It’s critical for drivers to have adequate insurance in place. Insurance safeguards you from the risk of loss, damage, theft, and can provide financial protection in the event you are involved in a collision or an accident. There are different types of auto insurance coverage to consider, and one of the most consequential is property damage liability insurance.
Property Damage Liability Insurance, Explained
To put it in the simplest terms, property damage liability insurance covers the costs associated with repairing another person’s property, should you do anything to damage it.
Currently, all 50 states require drivers to have at least some level of property damage liability insurance, though the minimums for coverage can vary from state to state. (Here in Texas, drivers are required to have coverage of at least $25,000.)
To better understand what property damage liability insurance is, and why it’s important, look at this example. You’re driving down the road and, from out of nowhere, a child darts into the lane. To avoid hitting the child, you swerve up onto the curb, striking and destroying a mailbox and sign for a local florist’s shop. Your property damage liability insurance might cover the costs associated with repairing or replacing the mailbox and sign, plus any loss of income the florist might experience as a result of the property damage.
What’s Covered by Property Damage Liability Insurance?
Property damage liability insurance covers any damage that you cause to another person’s vehicle or property. Some examples include:
- Expenses associated with repairing or replacing another person’s real or personal property, such as a fence, mailbox, home, vehicle, or small business, etc.
- Lost income associated with property damage (e.g., if you damage someone’s store and they have to close or stop normal business operations to make repairs).
- Expenses associated with another driver’s vehicle repairs, including body shop expenses, the cost of parts, etc.
- Coverage for any legal or court fees associated with the property damage liability claim.
How Does Property Damage Liability Insurance Work?
It’s important to note that damage liability insurance claims are made by other drivers or property owners on their own behalf. In other words, you don’t have to make the damage liability insurance claim yourself.
Here’s a quick rundown of how the process usually works: The other party will file the claim; all you have to do is notify your auto insurance company about the incident. Once the claim has been filed, your insurance company will check things like your policy limits and deductibles. The claim amount will be released in accordance with these and other factors.
If the claim amount exceeds your coverage limits, then the other party may contact you directly to recover the extra amount.
How Much Coverage Do You Need?
As for how much coverage you need, it really depends on how much time you spend on the road. Those who don’t drive too much can probably stick to their state’s minimum threshold. If you’re a real road warrior, regularly take long car trips, or have elaborate workday commutes, you may find it prudent to spring for additional coverage.
Questions about property liability coverage in Texas? We’re happy to help. Reach out to one of the insurance attorneys at McLaurin Law at your convenience.