Buying car insurance without understanding what you're purchasing creates uncertainty about your coverage. You worry about selecting a policy that won't adequately address your situation when an accident happens. The costs of repairing or replacing damaged property can quickly escalate, leaving you responsible for expenses that exceed your coverage limits.
At the Horan insurance agency, we work with multiple carriers to help Central New York drivers explore property damage liability options that fit their coverage requirements. Our experience with various insurance companies gives us insights into how different policies address property damage situations.
In this article, we'll explain what property damage liability covers, how coverage limits work in real-world scenarios, and how to determine appropriate coverage amounts for your situation.
Understanding Property Damage Liability Coverage in Central New York
Property damage liability is a type of insurance that covers damage to another person’s property or vehicle when you’re at fault in an accident. It also covers public property and debris removal.
Some examples include:
- You accidentally knock down your neighbor’s mailbox.
- Your vehicle collides with another car while reversing.
- You avoid hitting a deer by swerving but end up crashing into a utility pole.
- On a snowy day, you sideswipe a guardrail, causing damage.
Your PD coverage handles the costs of repairing or replacing these damaged properties up to your insurance policy’s limit.
How Property Damage Liability Limits Work
In most states, including New York, there are minimum coverage requirements for property damage liability, as we noted above.
New York State presently mandates a minimum of $10,000 per accident. If the repair or replacement costs are below $10,000 for a single accident, your policy provides sufficient coverage.
But if the cost of damages exceeds $10,000 and the accident is your fault, you could face significant financial challenges. When the expenses surpass your insurance policy’s coverage, you may be legally responsible for covering the remaining amount, which could result in a lawsuit against you.
For instance,
- Suppose Vehicle A ignores a stop sign and crashes into Vehicle B, which is a new car worth $30,000.
- Vehicle A only has the minimum coverage of $10,000 for property damage.
- The owner of Vehicle B can sue the owner or driver of Vehicle A for the remaining $20,000 (plus legal fees).
- This means the owner of Vehicle A will have to pay $20,000 from their own pocket or face a court order that may garnish their wages.
For this reason, we recommend considering significantly more property damage liability coverage than the state minimum. We believe drivers should evaluate coverage options beyond the bare minimum in terms of PD.
How Much Property Damage Liability Should I Have?
For those of you asking this question, the answer depends on your individual financial and family situation. However, you may be surprised to learn that increasing your coverage doesn't cost much more.
Consider increasing your limit from the $10,000 minimum to $50,000 in coverage. This is because the cost of repairing or replacing property can be very high, especially if you are involved in an accident with a newer or more expensive vehicle.
If you have assets, such as a house, savings, or investments, you may want to consider purchasing even more PD coverage. The increased limit can help address potential financial exposure in the event of a large accident.
Here are some tips for determining how much property damage liability coverage you need:
- Consider your financial situation. Do you have thousands of dollars in savings to cover the difference?
- Talk to your insurance agent. Your insurance agent can help you explore how much property damage liability coverage might be appropriate for your situation. They can also help you find coverage options that fit your budget.
It is important to note that PD is a type of car insurance that pays for the damage you cause to other people's property in an accident. It does not cover your car's damage. You need another type of insurance for coverage on your own vehicle.
This type of insurance is optional in New York State, unlike PD. You can read more about the insurance that covers your vehicle in our Comp vs. Collision article.
Find Property Damage Coverage That Fits Your Situation
PD coverage is a vital part of auto insurance that can help you avoid paying out of pocket for the damage you cause to other people's property in an accident.
In New York State, you are required to have at least $10,000 of PD coverage, but, as we've shown, this may not be enough to cover the full cost of the damage in some cases.
To help address your current assets or income, you may want to consider increasing your PD coverage to help address potential lawsuits and financial exposure.
Our agency can help you explore PD coverage options for your situation and budget. We have years of experience and knowledge in auto insurance and PD coverage, and we can assist you through the process of finding coverage that fits your requirements.
We'll handle the research and comparison work, so you don't have to.
To get started, click the Get a Quote button below and let us help you explore PD coverage options that fit your situation.
Or, if you’d rather dive deeper into the world of auto insurance, learn about bodily injury coverage.
Topics:
