How does Property Damage Liability work?
Many times on an auto insurance policy in Florida you will see liability coverages displayed as 100/300/100 or some other set of numbers separated by a “/”. These numbers are in thousands of dollars and depict the amount of coverage you have for liability insurance.
The first number is the amount of bodily injury liability per person ($100,000). The second number bodily injury liability per accident ($300,000). And the third number is the amount of property damage liability per accident ($100,000).
Property damage liability is the coverage that pays for objects you damage as a result of an automobile accident.
Here’s an example….
Let’s assume the red car pictured above has an auto insurance policy with liability coverages of 100/300/100. And let’s also assume that the red car is 100% at-fault when it hit the yellow car. The red car has $100,000 of property damage liability insurance (the third number in the set) to cover the repairs to the yellow car. In this situation, it would appear the red car has sufficient coverages to cover all property damage losses.
But what if the coverages were 10/20/10….
If this were the situation, the red car would only have $10,000 of property damage liability insurance. For illustration, let’s assume the yellow car was worth $30,000 at the time of loss. This means the owner of the red car would have to pay $20,000 out of pocket to cover all property damage losses.
What should you do….
Check your coverages! Don’t just assume that because you have an auto insurance policy that you have sufficient coverages. Plan for the worst and hope for the best.
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