Pennsylvania Auto Insurance Simplified (part 2)
This week we will continue our previous discussion about liability insurance.
As we previously mentioned, liability insurance covers “the other guy.” The first type of liability insurance is bodily injury. In the event that you are responsible for an accident, this is insurance coverage that pays the medical costs of injuries sustained by others. It can also include wages lost during recovery from an accident, as well as “pain and suffering” incurred because of the accident.
The second type of automobile liability insurance that we will discuss is
Property damage liability insurance:
What is it and what does it cover?
Property damage liability insurance coverage includes the repair or replacement of property that was damaged or destroyed in an accident that is your responsibility. The property can include other vehicles, trees, mailboxes, fences, or buildings – any property that was damaged because of the accident. It would not only include parts and labor for a vehicle damaged in an accident, but also damage to items in the vehicle such as laptop computers, DVD players, cell phones, etc.
Why do you need it?
As with bodily injury liability, if you cause an accident, you are financially responsible. This means that you are personally responsible for any and all damage that has been done to property belonging to other people involved in the accident. When you purchase property damage liability insurance coverage, then your insurance company will pay the property damage costs, up to the amount of your coverage. Just like bodily injury liability insurance, property damage liability insurance is mandatory in most states.
What types of coverage are available?
Property damage coverage can range from $5,000 to $300,000, depending on the type of policy that you purchase. You may be able to choose between a split-limit policy and a combined single-limit policy. A single-limit policy has one maximum amount for bodily injury and property damage combined. The split-limit policy is the most common type, where bodily and property limits are “split,” with the third number in the split being the property damage limit. Take, for instance, a 100/300/50 split. That would translate to $100,000 bodily injury coverage per person, $300,000 bodily injury coverage per accident, and $50,000 property damage per accident.
How much coverage do I need?
The purpose of liability coverage is to protect your personal assets. In a serious accident, the state-required minimum coverage won’t come close to covering all of the potential costs. You may end up paying for a major portion of the costs out of your own pocket. In some cases, drivers have been forced to liquidate their property, their savings and even commit future earnings in order to cover their liability in accidents. A generally accepted rule of thumb is to carry $50,000 of property damage liability insurance coverage for every vehicle you own. The more valuable your assets, the higher your Pennsylvania auto coverage should be.