Property Damage for Auto Insurance: Should I Increase My Limit?
Property damage is payable when you are legally liable for damage to someone else’s property: when you’ve caused an accident (are at-fault) and the other person’s car is damaged (“bodily injury is separate, for the people who may be hurt). Property damage can also include other property, such as a phone pole or someone’s stone wall.
The staterequires you to have at least $5,000 coverage for Damage to Someone’s Property, so why would you want to pay for more? The reasons are pretty simple and straight forward.
First of all, think about how much everything costs these days. If you slide off the road and damage someone’s fence, it alone could cost $5,000. Imagine if you hit a house! We know that most accidents involve contact with other vehicles. How many cars do you pass that cost less than $5,000 today? These days the cost of a little repair for body damage can well above that. What if more than one car was involved; how much would have to be spent to fix a couple of cars these days? We had a situation a few years ago here in Norwell Center where an errant vehicle shut down a vibrant business for about two weeks. Wonder what that cost?
The second question is, “How much will increased limits cost me?” Actually, not much. Most of the coverage cost lies in the first $5,000. (Every $10,000 or higher claim starts with the first $5,000.) As an example, let’s use a good driver, over 6 years experience, living in Marshfield. The cost of minimum $5,000 of Property Damage is $11. If that coverage is increased to $50,000 (ten time as much but barely over the cost of many cars these days) the total cost increases by $26, or $37 per year. Most folks have $100,000 which is only $2 more. To increase to $250,000 increases the total premium by another $2. That’s what I have.
Making insurance make sense so you can make good decisions is what we’re about. A customer of ours described this situation his girlfriend is involved with: she had bought insurance from a call center in Ohio; by naming a price that lowered her monthly payments by about $10, her insurance changed to state limits ($5,000). After she accidentally rear-ended a new Mercedes a few months later, she was shocked to learn that the Mercedes insurance company was determined to get the $30,000 legally owed to them for the accident.
So, given a choice of the $5,000 minimum that Massachusetts requires, or increase that limit to an amount that may actually do you some good if you do have an at-fault accident, would you rethink this? The choice of course is yours, but be deliberate and informed so you will make the right one for you.
If you have any questions or would like to get a quote to find out how much it would cost YOU, please feel free to get in touch with us. Or, for more resources on auto insurance in general, visit our main auto insurance resources page.