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Property Damage Insurance

Property damage insurance, or as it is often referred to property damage liability insurance, will provide cover in the event that you damage someone else's property with your car. A prime example of this will be if a driver accidentally backs into a neighbour's car then property damage insurance will cover the price of repairs. You will actually find that property damage insurance is a requirement in the vast majority of states. Even if your specific state does not require you to have this, most auto lenders would prefer that you have this type of insurance. It is important to remember that without having property damage insurance you are likely to have to pay out of pocket expenses for the damage that has been caused by your vehicle.

If your vehicle has been involved in an accident and is partially, or fully, at fault for causing damage to another person's property, then this type of insurance policy will cover this. As with most insurance’s there will be deductible, and you will be responsible for paying this prior to any claim being met. In short, property damage insurance will cover the repair of a property if you have been found at fault for damaging it, and the replacement of property which will include personal items.

There are two types of property damage insurance and these are Combined Single Limit (CSL) coverage and Split Limit Coverage. Combined single limit will give you a single amount of coverage that you are able to apply to both property damage and bodily damage. With split limit coverage you are able to split the limits however you wish between bodily and property damage. An example of this may be that you decide to have $100,000 worth of bodily damage, and only $10,000 of property damage. If you were to drive into your neighbour's brand-new fence and this cost $15,000 to repair that would then mean that only $10,000 would be covered under this insurance policy, and therefore you would have to pay the remainder out-of-pocket.

Property damage insurance is a type of cover that everyone should have. This is especially true if you would be forced to liquidate your assets, such as your home, in the event of an accident. Having property damage insurance can also protect your other assets. However, as mentioned, not all states will require that you have this type of insurance. You may even find that certain states will offer an extremely expensive alternative which would typically involve you depositing money into a bond with the State government.

You are able to purchase property damage insurance at the same time that you buy your car insurance. You will find that all car insurance companies are able to offer both property damage and bodily damage insurance. You should be aware that your premiums will be affected by certain criteria. These include:

  • The make, model and year of your car. It is important to know that the newer your car is, the more expensive this insurance is likely to be.
  • Your annual mileage
  • Your age and driving record. If you have been issued with numerous driving tickets this is likely to increase the premium of your property damage insurance
  • The amount of coverage you require, and also the amount of coverage that is required by your state's laws
  • How long you have actually been with your car insurance company. You will typically find that the vast majority of insurance companies will offer loyalty discounts to regular customers

Many states will require drivers to purchase a minimum amount of property damage insurance, which is typically $5000. However, by simply purchasing the minimum amount you are likely to cause yourself problems further down the line. You must remember that this type of insurance policy is intended to repair or replace the damage that you have done to someone else's property. Imagine if you get into an extremely serious accident, you are likely to find that this minimal coverage is nowhere near enough. Property damage claims are known to be extremely high, and often if you do not have enough insurance you will be required to pay the majority of the claim out of your own pocket.

It is generally recommended that drivers should purchase $50,000 of property damage insurance for every vehicle that they own. It is often a good idea to purchase as much as this type of insurance as is affordable to you, as this is likely to save you much heartache in the future should you cause damage to someone else's property in an accident. You should also be aware that property damage insurance is limited to the damage that you might cause to someone else's property or vehicle. Therefore if you are underinsured, or even uninsured, as a driver and are found to be a fault for an accident, you will have to incur the expenses for your car on your own.

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