How Property Damage Liability Insurance Works in Colorado

Property damage insurance covers the costs associated with repairing or replacing a vehicle, or other forms of property belonging to another person. An individual only uses this type of insurance when he or she is deemed “ at fault” for an accident and has inflicted substantial damage to another person’s property.

If you or a loved one has been hit by a reckless driver and your property has been damaged as a result, the liable driver’s insurance provider might be responsible for compensating you. At the law offices of Jeremy Rosenthal, our Denver car accident attorneys encourage everyone to know their legal rights, especially when dealing with third party insurance companies and policies. The more you know, the higher the possibility that you will receive all the compensation that you are entitled to. We are here to help you get the compensation you deserve. Contact us today for a consultation.

How Much is Covered by Property Damage Insurance?

The amount covered by property damage insurance depends on the policy. Reread the policy contract or contact an insurance agent for clarification on the amount you have purchased if you are uncertain as to the extent of your coverage. If the liable driver’s car is damaged or totaled in an accident, property liability coverage will not cover that damage. In order for a person to be able to pay for the damage inflicted to his or her own property, collision and/or comprehensive coverage should be considered. The following is a list of all the things that would most likely be covered by a Colorado property damage liability insurance policy:

• Repairs or a complete replacement for the damage caused to another driver’s vehicle (this includes mechanic fees and replacement fees)
• Damage inflicted to nearby property (businesses, mailboxes, fences, walls, street lights etc.)
• The lost income from a business or other establishment due to the accident that an at-fault driver caused
• Court fees, attorney fees, and other fees associated with filing a property damage claims

Bodily Injury Liability Versus Property Damage Liability

Colorado drivers often hear the terms bodily injury liability and property damage liability used together, but these two coverages protect against very different types of losses. Understanding the distinction can help you recognize what an at-fault driver’s policy may, and may not, pay for after a crash.

Bodily Injury (BI) Liability Coverage

Bodily Injury (BI) Liability coverage is the portion of an at-fault driver’s policy that responds when a crash causes harm to people rather than property. If another driver causes an accident and you, a passenger, or a pedestrian suffers an injury, BI liability can help pay for medical treatment, rehabilitation, and lost wages resulting from time away from work. It can also help cover legal defense costs for the at-fault driver and, in the most serious cases, funeral expenses for someone who does not survive the crash. One important limitation applies here: BI liability belongs to the at-fault driver’s policy and exists to compensate other people. It does not pay for the at-fault driver’s own medical bills, which is why many Colorado drivers also carry personal injury protection or medical payments coverage on their own policies.

Property Damage (PD) Liability Coverage

Property Damage (PD) Liability coverage works differently. Rather than addressing injuries to people, PD liability helps pay to repair or replace physical property that an at-fault driver damages in a crash. This most commonly includes another driver’s vehicle, but it can extend to structures near the roadway as well, such as a fence, a mailbox, a utility pole, or a storefront struck during a collision. As with BI liability, PD liability is designed to compensate others. It does not cover damage to the at-fault driver’s own vehicle, which is why comprehensive and collision coverage exist as separate, optional protections that a driver would need to carry on their own policy.

The distinction between these two coverages becomes especially important when you review a split limit policy, since Colorado insurers commonly list bodily injury and property damage limits separately, such as 25,000/50,000/15,000. The first two numbers represent what is available for bodily injury claims, while the third number is reserved exclusively for property damage. If a crash causes significant harm to people involved, the property damage limit will not be available to supplement bodily injury costs, and the reverse is also true. This is one reason a thorough review of the at-fault driver’s declarations page matters before assuming a claim will be fully covered.

At Rosenthal Injury Law, our attorneys frequently work with clients who assumed a single insurance payout would address both their medical bills and their vehicle repairs, only to learn that bodily injury and property damage claims are evaluated and paid separately. Jeremy Rosenthal and our team review the at-fault driver’s policy limits early in a case so that clients understand which coverage applies to which loss, and so that any gap between available insurance and actual damages can be identified and addressed.

Colorado’s Fault Based System

In order to understand how property damage liability insurance works and when it comes into play, one must educate themselves as to how the state they reside in assigns liability. The system that a state adheres to determines whether a person can hire a lawyer when seeking individual assets for damages, must solely operate through an insurance company or is granted the option of choosing either one. In Colorado, residents are granted the option of choosing either alternative in their pursuit of recovering damages due to its recently enacted fault system. Under this current, tort-based system, victims who are injured in a motor vehicle accident are able to recover damages from the at-fault drivers’ auto insurance provider.

This represents a drastic change in comparison to the state’s old law, the “no-fault system.” Before, anyone who was injured in an accident, whether they were responsible or not for it happening, was allowed to receive personal injury protection (PIP) benefits under their prospective insurance policy. Under the former legislation, residents were able to immediately file claims and quickly resolve issues since no was legally considered liable for an accident. But with the sudden change in legislation to a fault-based system, a lot has changed for Colorado drivers regarding insurance coverage.

How Property Damage Liability Insurance Works

Property damage liability insurance packages are typically offered in two fashions: single limit policies and split limit policies.

Single Limit Policy

In the case of a conflated single limit policy, a provider will give the person who bought the insurance the choice of how to divide the coverage between bodily injury and property damage. An example of this policy would be paying for a total of $250,000 in single limit coverage. This would mean that a person would be protected for both property and liability damage coverage up to that amount of money per accident. It doesn’t necessarily matter how much the property damage is in comparison to the liability damage. Some people decide to select this form of property damage because it’s less complex than split limit coverage.

Split Limit Policy

However, when an individual chooses a split limit policy, the insurance company gets to decide how much they are willing to pay for each form of liability coverage. Colorado residents will likely see this policy package written like this: 30,000/50,000/25,000 (or any variation of this).

• The first number (30,000) represents the amount that an at-fault driver’s insurer is required to pay for bodily injury expenses per person
• The second number (50,000) refers to the total amount that the at-fault driver’s insurance provider for bodily injury expenses per accident
• The third number (25,000) represents the amount that the at-fault driver’s provider will pay for property damages

With either type of property liability insurance, the insurance will only carry out its part of the bargain. This means that any accident-related costs that happen to be above the limits a person purchased will now be the driver’s responsibility to cover.

Colorado State Limits

Each state has minimum insurance coverage limits that they require each insured driver to buy from their insurance providers. In Colorado, each person has to buy a package that covers at least $15,000 of damages. However, Colorado residents may still opt to purchase limits higher than the minimum set by the state. In fact, according to data compiled by local insurance companies, most state residents decide to purchase property damage liability insurance with a $100,000 limit. This is an important decision, especially considering that all other costs will have to be paid for out of the pocket of the liable driver. Purchasing property damage liability insurance, while initially more expensive, may save a driver substantial costs in the case of an accident.

Talk to a Colorado Property Damage Attorney Today

Property damage and bodily injury claims can move on separate tracks, and knowing which coverage applies to which loss can make a real difference in how quickly and fully you are compensated after a collision. Whether you are dealing with a damaged vehicle, an injury, or both, understanding the at-fault driver’s policy limits is an important first step.

Our team at Rosenthal Injury Law is prepared to review the details of your accident, explain how property damage liability insurance works in Colorado, determine the applicable insurance coverage, and help you pursue the compensation you are owed. Reach out to our office to discuss your property damage or bodily injury claim with our team.