Most drivers know that they need car insurance. Yet, few people understand what many of the terms included in their policy mean. One key component of every car insurance policy is the property damage section. Here are a few tips for understanding what this coverage includes and how to ensure that you have enough of it.
Tip #1: Property Damage Coverage Pays For The Other Person's Car
One common misconception about property damage coverage is that it pays to fix your vehicle after an accident. This is not true. By contrast, that's what collision coverage is for. Property damage coverage — which is required in many states by law — pays to fix vehicles owned by other people if you're in an accident that's deemed your fault. For example, if you accidentally bump the car in front of you while stopping at a red light, the property damage portion of your auto policy would pay to fix their scratched bumper. It would also likely cover any applicable rental car fees the other driver accrues while their vehicle is being repaired.
Tip #2: Property Damage Also Covers Other Items
This section of your policy doesn't cover only other cars. It could also pay to fix additional items.
Let's consider a scenario where you swerve to miss the neighbor's dog in the road and accidentally take out their mailbox, white picket fence, and a flower bed with your car. In this case, your property damage coverage also covers the cost of replacement for these items and prevents your neighbor from filing a lawsuit for the damage.
Tip #3: It Is Possible To Have Too Little Auto Insurance Coverage
It is possible to keep your property damage coverage limits too low. In some states, the minimum amount of coverage required to drive legally is only $15,000 or $25,000, for example. If you're involved in an accident where there's damage to new vehicles and other objects, this coverage level could be insufficient to pay for damages for the whole claim. That leaves you to pay for the excess out of your own pocket. This is a frustrating scenario, with the potential to cause lasting financial harm. It could lead to lawsuits, wage garnishments and more.
Instead, it is always a good idea to talk to your Prestige Insurance Group agent about your exact needs before deciding on a policy. In many cases, raising your property damage level can still be affordable. Contact our team today to schedule an appointment.
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