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. 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
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.
Experienced Car Accident Attorneys
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, we 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.