What is Property Damage on Car Insurance?

Of the many options you may purchase as a part of your car and truck auto insurance policy, one of the most crucial coverage features is property damage (also called property damage liability).

According to "10 Must-Know Car Insurance Definitions", property damage liability is defined as coverage "... if your automobile damages another's property. Full coverage in this form may also provide you with legal defense on the chance the other party files a legal claim against you."

More specifically property damage liability coverage compensates for damage done to another's property if you have an accident when you are determined to be at fault.

Property Damage Liability Applied

Take for example a single-car mishap in which another party's property is damaged or destroyed. This incident would be covered by property damage liability. If your car or truck strikes someone's fencing, tool shed, lawn decorations or other stationary objects, property damage liability coverage would offer compensation of a certain amount, up to the maximum your coverage provides.

On the chance of a two-car accident where you are found to be at fault, your auto insurance property damage liability feature will fund repair costs of the other vehicle involved and damage to property that may have occurred. For example, if your vehicle has a part in a two-car collision but the cause of the accident is found to be the other person's fault, their property damage liability auto insurance would generally cover anything ranging from damage to your car and any irreparable damage to loss of personal belongings as a result of the accident.

Rates for Property Damage Liability Auto Insurance Coverage

Annual rates for property damage liability insurance vary greatly and are determined by the insured's driving record, age, location, and the make/model and production year of the car being covered. As they are seen as a higher risk for accidents and subsequent insurance carrier payouts, those drivers carrying tarnished driving records (indicating traffic citations, and previous at-fault accidents) will more than likely pay higher premiums than someone with a spotless driving record.

Demographics Factor in Also

Younger drivers are more often considered a higher risk on account of their inexperience on the road. The locale where a car is parked and driven factors in as well. For example, damage and accidents are more likely to occur on the highly trafficked streets of Chicago, Illinois, versus (for example) Blythe, Arizona.

For any questions you may have about the Property Damage Liability features of your Auto Insurance policy, speak with your insurance agent.

Sources:

"10 Must-Know Car Insurance Definitions" by John Melendez, Associated Content

Suggested reading:

"Does Your Credit Score Affect Your Auto Insurance Rates?" by John Melendez, Associated Content
"Commercial Umbrella Insurance" by John Melendez, Associated Content