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Is Property Damage Liability Required in Every State?

Posted in Auto Insurance , Property Damage

September 3rd, 2009
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Laws differ from state-to-state, even when it comes to auto insurance.

The laws of minimum insurance policy and coverage varies throughout the nation and it applies to many types of insurance such as health insurance and auto insurance coverage. Because of that difference, not all states require property damage liability.

What is property damage liability

Property damage liability coverage addresses the costs of damages to the other driver’s vehicle or property should you be involved and found at-fault for an auto accident. Commonly, property damage liability insurance also covers the damage caused by other authorized drivers of your vehicle. As of the publishing of this article, states that do not require property damage liability clauses in their auto insurance police includeCalifornia,New Hampshire,Tennessee andWisconsin.

The states that typically do not make property damage liability mandatory have other policies in place to ensure that debts you incur because of your driving are still your financial responsibility. Some provisions required by the states in lieu of property damage liability insurance are:

California

• Motor vehicle or automobile liability insurance policy coverage
• A self-insurance certificate issued through the DMV
• $35,000 cash deposit to theDepartment of Motor Vehicles (DMV)
• A California-issued insurance company licensed surety bond for $35,000

New Hampshire

• A $75,000 single limit policy will require the total coverage required by law
• New Hampshire’s Financial Responsibility requirement must be met

Tennessee

• Motor vehicle or automobile liability insurance company coverage is required
• $60,000 cash deposit or bond held at the Department of Safety
• Self-insurance certificate

Wisconsin

• Motor vehicle or automobile liability insurance company coverage is required
• $60,000 cash deposit to the Department of Motor Vehicles (DMV)
• A Wisconsin-issued insurance company licensed surety bond for $60,000

Despite not all states requiring property damage liability insurance, they still legally mandate certain types of financial responsibility to those who drive. Many times property damage liability insurance is still available in the states not legally requiring this type of coverage and may be worth adding to your auto insurance policy because of the benefits provided by property damage liability insurance.

Should I Get Property Damage Liability Only?

Posted in Auto Insurance , Low Cost Car Insurance , Personal Injury Protection , Property Damage

July 15th, 2009
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It is a fact, to legally own and operate an automobile in the United States, a minimum amount of auto insurance coverage is required in some states. Although the minimum coverage amount is determined by law, the state in which a policyholder lives and registers the vehicle determines the amount essential for each vehicle. The minimum levels of auto insurance is comprised of both bodily injury liability limits and the the property damage liability limit. If you want to drive legally and provide a level of respect and responsibility to your fellow man, you need to have both in your car insurance coverage and not just property damage liability.

Do You Need Property Liability?

Property damage liability is a great type of insurance to have. If a policyholder is found at fault for causing an accident, the property damage liability portion of the policy will kick in to cover the cost of fixing or replacing the victims vehicle or other property damaged in the accident. This limit is capped by the maximum property damage liability insurance you purchased in your policy.

What Does Property Damage Liability Cover?

Property damage liability only covers property. If you get involved in a collision and are found at fault, you may also become responsible for paying the medical bills of the injured driver or passengers in that vehicle. That is where the bodily injury liability insurance comes in handy. If you choose to only get property damage liability, and are liable for the accident, you may have to pay large sums of money, based on the level of medical expenses they incur due to your driving.

Opting to only get property damage liability is not a smart decision. Not only is it probably illegal in your state, it is a foolish risk to take just to save a few dollars in the short-run as it could destroy you financially. Did you know that medical debt accounts for 60% of new bankruptcy cases? It’s true, and medical bills can come about due to medical illness or, you guessed it, bodily injury caused by accidents.

Do you need a car insurance policy that covers the all-important personal injury protection and property damage liability? If so, Go Insurance Rates can give you access to free online auto insurance rate quotes. The process only takes minutes and is absolutely secure.

Does Property Damage Liability Cover My Car as Well?

Posted in Auto Insurance , Property Damage

July 2nd, 2009
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Cruising around without car insurance is like trying to walk on a tightrope inheels – neither is really a smart decision to make. Most states require a level of property damage liability for policy holders to have on all the vehicles they own and operate. Property damage liability auto insurance is a degree of coverage that kicks in to pay the expenses to repair or replace property caused by damage inflicted by the at-fault driver involved in an accident.

Property Damage Protection

Although, the insurance is required by law, there are many drivers trying to skimp by driving without the minimum levels of insurance required by law. If you end up in an accident with one of these negligent drivers who are found at fault, and they do not have the proper level of insurance protection, your insurance may have to kick in to cover the losses you experience.

The additional coverage for your expenses would not come from your property damage liability coverage, but should be covered by your collision insurance.Collision insurance pays for damage to your car resulting from an car accident regardless of who was at fault for causing the accident.Collision (aka comprehensive) auto insurance covers your personal property.

What Does Property Damage Liability Cover?

Property damage liability covers the damaged property of the the other person or victim of a car accident.Property damage liability only covers your direct actions if you were found at fault for an accident. Generally, property damage liability will pay for the cost of repairing the other person’s vehicle, but may also be used to fix or replace types of property like fences, mailboxes, bicycles and even damage to their home. Additionally, property damage liability will provide you with legal defense if another party files a lawsuit against you as the insurance company wants to limit the cost of out of pocket expenses they need to pay.

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Who Needs Property Damage Liability?

Posted in Auto Insurance , Auto Insurance Claims , Compare Auto Insurance , Comprehensive Insurance , Property Damage

May 11th, 2009
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If you are a new driver in the process of purchasing your first car, aside from the vehicle price tag there are other factors you need to include in your transportation budget. Car maintenance, fuel expenses and car insurance are all mandatory expenses that need to be worked into the final price. When it comes to car insurance, that cost will be influence by the type of vehicle you buy, your driving history, age, gender and the state’s minimum requirement for proper levels of insurance. Every state has their own laws governing the amount of insurance drivers must carry, and the state requirements for property damage liability is generally $5000-$25,000.

Why Property Damage Liability?

Everyone needs some degree of property damage liability as mandated by the local laws of the state in which they reside and insure their vehicle.Property damage liability will provide you with auto insurance coverage in the case you are found at fault of causing an accident. The insurance will kick in and provide financial coverage for the repair or replacement of vehicles and other structures (such as homes, buildings and telephone poles).

How Property Damage Liability Can Save You

Typically, a small level of this insurance is required by law, however, your personal needs may vary greatly and you may need more property damage liability auto insurance coverage then your state calls for. Consider if you are a homeowner with $10,000 of property damage liability car insurance. If you end up causing an accident with a luxury vehicle valued at $40,000 and their car is totaled beyond repair, you will be found responsible for making retributions. That means you may have to mortgage your home to the tune of $30,000 and up to pay off the remainder of the debt that you caused.

Even if you have a spotless driving record and feel 100% confident with your skills, you need property damage liability insurance to protect yourself and your financial assets in a worst case scenario. Not only may it be the local law of your state, it is a wise level of protection to add to your car insurance policy.

Considerations Before Filing an Auto Insurance Claim

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Liability , Property Damage

April 20th, 2009
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Auto insurance is supposed to be simple: you get into an accident, you file a claim and let your insurer handle it. But in reality, this is not always the case as there are things you should consider before filing an auto insurance claim.

Although state laws mandate certain types of insurance coverage to legally drive, there are no laws on record thatrequire you to report accidents to your insurance company. Every time you do file a claim with your insurance company, it is marked on your permanent record. Although your premium may not go up immediately, if there are enough reports over time there can be a negative impact to the total cost of your auto insurance.

Before You File a Claim

When deciding between filing a claim with an insurance company, there are some things to consider during the decision making process. For example:

• Will the repairs cost less than your deductible?
• Do you have a large history of auto insurance claims?
• Was your vehicle solely involved in the accident?
• Have you had a previous accident that you were found at fault for and filed a claim?

If you cause minor damage to your vehicle and there are absolutely no other cars involved in the collision, you may opt to pay for the repair out of pocket. If the deductible of the insurance is greater than the total cost of the repair, you would end up paying the expenses anyway. In this case, there is no need to report the incident to your insurance company as you are the only one who suffered any damage and the choice is entirely up to you.

Reasons You Should File a Claim

However, if you were in a collision with another vehicle, it may behoove you to file a claim and risk the increase to your auto insurance rates. Even if the other driver involved in the collision begs you for mercy you should think twice. By not filing a claim with your insurance company, the other driver still may come around and sue you for their costs and if you never made the claim to your company, they will have a harder time fighting to protect you. Many people involved in a car accident will immediately assess the damage and make their own estimates of how much it will cost to repair, and they may be grossly underestimating the costs.

Understanding Diminshed Value Payments

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Comprehensive Insurance , Liability , Property Damage

April 16th, 2009
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Once a car is damaged in an accident, it will truly never be as “good as new,” because of the diminished value caused by the wreck. Once a car is involved in a collision, although auto insurance may cover the repairs of the vehicle, the car will never be worth its full value again because repair work for an accident lowers the value of your vehicle. Your car will now have a permanent history of being wrecked, and consumers will not be willing to pay full price for a previously damaged vehicle, no matter how well the repair job was done.

Calculating Diminished Values

Typically the decline in value is 18% between thepre-crash and post-crash estimate. That difference is officially called the “diminished value.”Whether or not your auto insurance company will cover the difference of the diminished value payments depends on local state laws. In most states, the insurance coverage willguarantee that a car will be repaired to pre-accident condition, and unless state courts mandate otherwise, the diminished loss value is your loss to deal with.

No Laws Requiring Diminished Value Payments from Insurers

Although consumer advocates fight insurance companies to pay for a diminished value payment to policyholders (assuming their vehicle is restored and repaired), not all states agree it should happen. Because of the different views between policyholders, consumer advocates and insurance providers on this matter, there are a plethora of court cases battling out the rights in question.

45 states have language on the books limiting the coverage provided by the insurance coverage to exclude diminished value from the realm of their responsibility. TheInsurance Services Office (ISO) composed policy language that officially releases insurers from making diminished value payments in physical-damage coverage claims. OnlyGeorgia, Hawaii, Kansas and Maryland have not adopted this language, while Massachusetts does not use this language but followed an advisory committees policy ensuring no diminished value payments.

The only way to possibly claim a diminished value payment is if someone else hits you and is found in fault for the accident. Their insurance will take effect to cover your losses, and since you do not have a direct contact with their insurance provider, the language preventing you from claiming diminished value payments will not apply to you. This process is alsocalled a third-party claim.

Working With Another Insurer When Not at Fault for an Accident

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Liability , Property Damage

April 15th, 2009
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The aftermath of a car accident is oftentimes difficult to deal with. Even if the damage to your health and property are minor, and you are not found at fault for the collision, working with another auto insurance company to settle your claim can be a stressful and time consuming process. The first step in this process happens immediately after the collision. You need to document all the information associated with the accident and driver to get the claim process started.

Starting the Claims Process

1. Contact your own auto insurance provider to establish a good-faith accident report
2. Contact the other driver’s insurance company (they may be embarrassed or have other reasons for not calling in the collision, and therefore hesitate in making the call – this can prolong the claims process if you are not proactive)
3. Take your vehicle in for an estimate (you will need permission from both insurance companies)
4. Send your repair quotes to both insurance companies

Use the Police Report

If there is any hesitation from an insurance provider in paying for the repair of your vehicle and the police have reported that you were not at fault for the accident, simply provide them with a copy of the accident report and the process should quickly resolve itself.

Make sure to always deal with the insurance company representative in a polite and professional manner. By staying calm, you have a better chance of the insurance agent resolving your claim quickly and effectively.

Why You Need Underinsured Motorist Coverage

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Comprehensive Insurance , Liability , Property Damage

April 14th, 2009
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Underinsured motorist coverage is a way to protect an insured driver who becomes involved in a collision with another driver who does not have adequate auto insurance coverage. If the driver of the other vehicle is determined to be at fault and their policy limit does not cover your all the related expenses, you will most likely have to pay out of pocket to cover the rest if you do not have underinsured motorist coverage. Because many states have low auto insurance coverage minimums, their policies will most likely not cover them or involved parties in the event of a major accident.

Underinsured Motorist Coverage Basics

If you are involved in an accident, it is crucial that you write down the full contact name, drivers license number, model, make, license plate and insurance company information from the other involved party. If you are in an accident with an underinsured driver who is found at fault, you will be compensated for your damages by their insurance company up to their policy limits, and then you can make a claim with your own insurance company for the remaining balance.

Be Sure You Have Underinsured Coverage

It’s important that you make sure your policy covers underinsured motorist coverage. You need to check with your car insurance provider to ensure you understand the full terms of your insurance policy, and be sure to add on underinsured motorist coverage if it’s currently not included in your policy. You may also need to look into uninsured motorist coverage as well.

What is a No Fault Auto Insurance Law?

Posted in Auto Insurance , Collision Insurance , Liability , Property Damage

April 10th, 2009
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It is happening right now somewhere in the world. Despite the best of intentions and skills of two drivers, their cars are colliding and an accident has just occurred. In a fantasy world, both drivers would be able to file claims with their insurance companies and get the settlement money needed to make both them and their cars whole again. In reality, that is the concept before no-fault auto insurance.

No Fault Auto Insurance Law Basics

The no-fault insurance law is a type of auto insurance law that allows those involved in a collision to avoid being declared at fault – it makes both parties equally liable for the accident. The first no fault auto insurance laws were passed in 1970, and at that time 24 states opted to enact no-fault auto insurance laws.

States with Active No Fault Auto Insurance Laws

Currently only twelve states still have that rule on the books. Here are a list of states with active no-fault auto insurance laws:

• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Utah

Because the laws for no-fault auto insurance are constantly under review, it is important to contact your insurance provider to see how you are covered.

No-fault insurance eliminates having to find one party at fault for the cause of fender benders. The original purpose of no-fault auto insurance laws was to minimize the need of government intervention in the form of court proceedings. Additionally motorists could get back to driving more quickly than the traditionally methods of insurance claims.

Disadvantages of No Fault

Not all is positive when it comes to the no-fault auto insurance law. Many critics of the policy think that the lack of accountability the law creates contributes to the bad driving habits of the already reckless and careless. Another criticism of no-fault auto insurance laws is that for those twelve states that have them, the cost of their insurance is higher than the states that do not have the no-fault auto insurance law on the books.

Car Insurance Term: Property Damage Liability

Posted in Auto Insurance , Property Damage

February 14th, 2009
3 Comments

The term property damage liability refers to auto insurance for any and all damages you may be responsible for in regards to another automobile or private possession. Property damage liability coverage is required in all states (with one exception), and the minimum required amounts of coverage will vary from state to state.

When you get auto insurance for yourself and your car, one aspect of the entire package will be property damage liability coverage. The idea behind property damage liability is that if you are driving and cause an accident with another person or persons, you will be responsible for damages done to their property.

Again, property damage liability only pertains to accidents which you caused, no matter how accidental. So if you are driving along and are momentarily distracted by something and hit another car, you are responsible for the accident. You will be responsible for damages, hence the idea behind auto insurance itself. If your insurance has property damage liability up to, say, $50,000, and the damage to the other driver’s car is estimated at $10,000, your insurance will pay for those repairs once you have paid your deductible. Referring to the picture below – if, however, you have a minimal insurance policy and your property damage liability coverage is $10,000, and the damage you’ve done to the other driver’s car totals $20,000, then you will be required to pay the $10,000 difference. That’s why it pays to have a higher property damage liability limit for your car insurance.

If you have more questions about property damage liability or any other aspect of automobile insurance, be sure to call or sit down with an automobile insurance expert. He or she will answer any and all questions about car insurance, and help you determine the policy that’s right for you.

Here are other important auto insurance terms you should know:

1. Personal Injury Protection
2. Bodily Injury Liability
3. Comprehensive Auto Insurance